The maximum amount of earnings subject to Social Security will be $110,100 for 2012, up from $106,800 for 2011, the Social Security Administration (SSA) has announced. SSA also reported that the so-called “nanny tax” threshold will increase to $1,800 for 2012, up from $1,700.
Elective deferrals. The limits on elective deferrals for employees who participate in 401(k)s, 403(b)s, certain 457s, and the federal government’s Thrift Savings Plan increase from $16,500 for 2011 to $17,000 for 2012.
Catch-up contributions. Eligible individuals age 50 and above may make catch-up contributions to IRAs, 401(k)s and other savings arrangements. The catch-up amount for IRAs remains unchanged for 2012 at $1,000. The catch-up amount for 401(k)s, 457s, 403(b)s, and SEPs, also remains unchanged for 2012 at $5,500.
Personal exemption. For tax years beginning in 2012, the personal exemption amount under Code Sec. 151(d) is $3,800, up from $3,700 for tax years beginning in 2011.
Standard deduction.The standard deduction for single taxpayers increases from $5,800 for tax years beginning in 2011 to $5,950 for tax years beginning in 2012. The standard deduction for married couples filing a joint return increases from $11,600 for 2011 to $11,900 for 2012. Heads of households will see a $200 increase in their standard deduction to $8,700 for 2012, up from $8,500 for 2011. The standard deduction for married couples filing separate returns rises to $5,950 for 2012, up from $5,800 for 2011.
Gift Tax. The gift tax annual exclusion remains at its 2011 level of $13,000 for 2012. The exclusion for gifts to a spouse who is not a citizen of the United States increases from $136,000 for 2011 to $139,000 for 2012.