Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

   
Resources - Tax Center - Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York
     
 

2012 Individual Tax Credits & Deductions

 
 

The media’s attention to the “fiscal cliff” and the American Taxpayer Relief Act of 2012 (ATRA) distracted taxpayers during the 2012 tax year. As April 15th, the individual tax filing deadline, for the 2012 tax year approaches, it’s important to be aware of the various tax deductions and credits for which you are eligible. Boris Benic & Associates wants to remind you of the tax benefits available as you prepare to file your 2012 tax return. Remember, many of the changes ushered in by the ATRA have no impact on 2012 tax returns.  Below is a list of the tax credits and deductions many individual and married taxpayers are able to claim. They include:

  •  Mortgage Insurance Deductions – Taxpayers with an adjusted gross income (AGI) up to $100,000 qualify to treat mortgage insurance (more commonly known as private mortgage insurance – PMI) as interest paid on the mortgage. This means that 100% of all PMI payments made in 2011 are deductible. It’s important to note that the insurance must have been taken out after 2006 and the deduction is phased out in 10% increments for taxpayers with an adjusted gross income exceeding $100,000.

  • Mileage Deduction – Deducting mileage driven for work, charity, and medical and for other qualifying purposes is often an overlooked tax break. Mileage deduction can offer a significant tax savings when properly claimed. For 2012, the rate for business use of your vehicle is 55.5 cents per mile, medical and moving is 23 cents per mile and charitable use is 14 cents per mile. To claim this deduction it’s essential to have proper documentation that supports your claims.

  • Medical Expense Deduction – If you incurred a large amount of medical expenses in 2012 then you may be eligible to deduct a portion of these expenses. For 2012, if your payments for medical and medical related services exceeded 7.5% of your AGI then you can deduct a portion of those expenses on your tax return.

  • Child Tax Credit – Individual taxpayers may claim up to $1,000 per qualifying child who was under the age of 17 on December 31, 2011.  It’s important to note that this credit can be claimed in addition to the child & dependent care credit, but the benefit is reduced for married couples with an AGI of $110,000 and single filers with an AGI of $75,000 or more.

  • Child & Dependent Care Credit – This credit is available to taxpayers that pay someone to care for dependents under the age of 13 so the taxpayer can work or seek employment. The credit is applies to 20% to 35% of dependent care expenses up to $6,000. The total dollar amount of your credit depends on several variables including overall income in 2011.

  • Energy & Appliance Tax Credit – Taxpayers that made energy efficient upgrades to their residence in 2012 may be eligible for a 10% tax credit for the cost of the upgrade up to $500. Qualifying improvements include but are not limited to the following items; new windows, insulation, high efficiency furnaces, water heater and air conditioners. When claiming this credit it’s critical that you have copies of the receipt and the manufacturers energy efficiency certification.

  • American Opportunity Tax Credit – In tax year 2012, college students may claim a $2,500 “higher education” tax credit for the first four years of college only. The credit allows 100% of the first $2,000 of tuition and related school expenses incurred during the tax year to be claimed. It also provides an additional 25% of the next $2,000 of tuition and related expenses in the same tax year.

  • Student Loan Interest Deduction – Current and former students incurring interest on student loans are eligible to deduct a portion of the interest expense incurred in 2012. The deduction is worth up to a maximum of $2,500. The deduction begins to phase-out for married taxpayers filing a joint return of $125,000 and phases out completely at $155,000.

  • Retirement Savings Contribution Credit – This tax credit is designed to help low to moderate income workers save for retirement. The credit of $1,000 per person is available to single individual with incomes up to $28,750 and married couples with joint income of up to $57,500.

  • Classroom Deductions for Teachers – Primary and secondary school educators who work 900 hours or more during the school year are eligible to claim a deduction of $250 for unreimbursed expenses including books, supplies, software, and supplementary materials used in the classroom. If taxpayers are married, filing jointly, and are both educators the maximum deduction amount is $500.

Contact Us

Need help with your 2012 individual taxes? Unsure if you qualify for the deductions/credits listed above? Contact Boris Benic & Associates to find out why so many individuals turn to our firm for tax planning and compliance assistance. For additional information, please contact Boris Benic, CPA, at 516-248-7361, or click here to email Boris. In a brief consultation he can address your concerns and determine the best way to proceed.

 

Source: IRS

 

 
 

Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

 

Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York