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2012 Tax Rule Changes: What You Need to Know

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Tax changesLike it or not, the rules for filing your taxes change every year. Even experts have to relearn the ropes annually, with law changes, new forms, and other hurdles posing a constant challenge.

With just over a month to go before the filing deadline, here's a gallery of some of the more important changes hitting taxpayers this year. For a more complete list, look at the IRS' summary of tax law changes.



Fool.com contributor Dan Caplinger dealt with plenty of changes on his taxes this year. You can follow him on Twitter here.

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What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

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ibjunebug2

need to know all the changes before I begin to file my taxes ( more categories?)

April 09 2012 at 8:50 PM Report abuse rate up rate down Reply
Carroll

BSBSBSBSBSBSBSBSBSBSBS

April 04 2012 at 3:08 AM Report abuse rate up rate down Reply
larry

Next year we won't have to worry about filing taxes. Just give Obama your entire years earnings.

April 04 2012 at 3:08 AM Report abuse rate up rate down Reply
Scott Solheim

That is all determined on the state level. In MN, we don't have taxes on food (except for pop and a few things that aren't necessary), and no taxes on clothing. Public schools? How are they going to exist without taxes?

April 04 2012 at 1:37 AM Report abuse rate up rate down Reply
kng20

I along with many others are sick of the never ending changes and addition to the anual Fed and State Taxes. I am self employed and have 2 full time people working for me. When I started my business back in 1976 my Fed and State Tax return consited of 7 pages. The 2010 return of Fed and State consisted of 132 pages. Form 4543, Form 8903, Schedule M, endless 1040 worksheets, Bonus Depreciation Report, there seem to be no end to adding more to it. In 1976 it took me about 2 hours to prepare all my information for the Accountant. Then I paid him 40 dollars to finalize my Taxes - In April 2011 it took me about 12 hours to prepare it for him and then paid 800 dollars to have him finalize and file it. One has to wonder "What is the goal here by the Fed and State Gov?" To crush small business like us?? Well - they are doing a good job of heading in that direction.

March 20 2012 at 5:59 AM Report abuse +1 rate up rate down Reply
PLW

If you're laid off and draw unemployment, you're taxed on that. I'll agree, it's income but, I don't understand the concept. It's a small portion of what you were making or what you'd be glad to make if only you had a job. Not only that, in part, it's monies that your employer has contributed to the program he's already been taxed on. His company profits/income and I don't think the taxation for him comes after unemloyment compensation. Isn't that double taxation on the money? I'm totally confused so if anybody can explain the rationallity of it, please do. I totally agree on a flat tax. Everybody taxed at a specific rate, no loopholes.

March 20 2012 at 4:34 AM Report abuse +1 rate up rate down Reply
shelly6509

Hi, I am a In-Home Child Care Provider and I am new at this and would like to know the tax Guide for the Self Employed. I do have an EIN for filing my taxes, Thank you for your time.
Shelly6509@aol.com

March 20 2012 at 3:38 AM Report abuse rate up rate down Reply
pschemke

There should be no deductions at all. Just a flat 10% tax for everyone. We have the most complicated, convuluted tax code in the world. That way big corporations like Apple would actually bring their off shore money into the States and we would all benefit from the 10% on those billions. Instead, they pay no taxes.

Just get the flat tax. Can you imagine paying taxes on Cash for Keys? Sorry Makeminepine. That is ridiculous.
You just lost your home. I hope life gets better for you.

March 20 2012 at 2:58 AM Report abuse +1 rate up rate down Reply
PRAZNGODDAILY

I still can't understand why yhe government taxes your retirement check. If you set up an IRA, and pull money out during your retirement, they tax that too. Why bother, just spend it all or put it under your mattress.

March 20 2012 at 12:34 AM Report abuse +1 rate up rate down Reply
makeminepine

Im being taxed 1000.00 for a 4000.00 cash for keys check given to me when B of A took my home...I got a 1099 from the realty company.. it dont seem right...that was an incentive check..should it be taxed??

March 20 2012 at 12:29 AM Report abuse rate up rate down Reply
1 reply to makeminepine's comment
pschemke

You are right, makeminepine, you just lost your home. You should not be taxed on monies that were meant to get you on your feet. The purpose of that money is so you will have enough for the first months rent and a security deposit somewhere.I hope your life gets better. Stay healthy

I vote for the flat tax. 10% for everyone. No deductions. The tax laws are too confusing.

March 20 2012 at 3:04 AM Report abuse rate up rate down Reply