January 11, 2012 10:02:33 am
A number of new tax provisions became effective on January 1st. The changes most important to business owners and managers are below.
For a full list of 2012 tax provision changes, please see The Journal of Accountancy.
- A number of standard tax tables changed this year due to inflation adjustments. Among the new provisions, the personal exemption amount increased to $3,800. New contribution limits go into effect for pension plan retirement accounts, and the Social Security wage base increased to $110,100. Finally, the standard mileage rate for medical and moving expenses decreased to 23 cents per mile, but the standard mileage rate for business use of an automobile remains at 55½ cents.
- Employers that hire military veterans may continue to be eligible for tax credits up to $9,600 for each qualified veteran they hired between November 21, 2011 and January 1, 2013.
- While the 100% bonus depreciation provision is no longer in effect, the 50% bonus depreciation is still effective for property placed in service in 2012.
- The Voluntary Classification Settlement Program (VCSP) limits employers’ tax liability to 10% when they reclassify their workers as employees rather than as nonemployees for federal employment tax purposes.
The information contained in this blog is not intended to be tax advice, is of a general nature, and is based on authorities that are subject to change. Application to your specific situation should be determined in consultation with your tax advisor. IRS Circular 230 Disclosure: Any tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein.
Tags: Tax, Benefits, Accounting Standards
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