The official Federal Tax Brackets for 2012 was issued lately by the IRS. It may take you by surprise but the breakdown of income is quite similar to the 2011 federal income tax brackets, with the only modification being done in the accommodation of inflation to the income levels and deductions. Here’s a rundown on how the tax brackets appear this year.
Tax experts assemble each year, around this time, to envision how the income brackets will look like, by assembling inflation data. This is done so that the tax rates are abreast with the rising inflation. The year 2010 saw some complexity due to the Bush-era tax cuts, but the matter was resolved and 2011 tax brackets showed a slight change from 2010 tax cuts. This time around, all one can see is minor changes in the tax brackets and standard inflation deductions.
2012 Federal Income Tax Brackets
Just like the tax brackets for the year 2011, common federal tax brackets for the year 2012 which have been updated, are divided into four filing categories; viz.,
- Single filers
- Married and filing separately
- Married and filing jointly
- Head of household
The regular deduction provisions, namely the standard and itemized IRS tax deductions list have also not changed much. Compared to last year (when the rise in inflation averaged 1.48%), this time i.e., over the last one year, the rise in inflation averaged 2.43% (higher than 2011); however, this average is still low if we compare the inflation statistics over the past 20 years. Although the tax brackets for 2012 have come up, most citizens are not too worried with the figures until next year. Come April and you will need to look into the tax brackets, if you have to file your 2011 returns.
IRS Tax Brackets: 2012
Apart from the aforementioned minor changes, no significant changes have been mandated. The IRS tax rates and the basic rules for filing and standard deductions have remained the same. For 2012, there will be six tax rates: 10%, 15%, 25%, 28%, 33% and 35%. Here are some tables depicting federal tax brackets for 2012. The first one is for the tax deductions for individuals, which are standardized in nature. They are followed by tables for the current tax rate brackets.
Standardized Tax Deductions
| Status | Standard Deduction in $ |
| Tax payers filing as singles (married or unmarried) | $5,950 |
| Married tax payers filing jointly | $11,900 |
| Head of household | $8,700 |
Unmarried Individuals
| Income Amount | Tax Implication and Applicable Rate |
| more than $0 but not more than $8,700 | 10% of taxable income |
| more than $8,700 but not more than $35,350 | $870 (+) 15% applicable for amounts exceeding $8,700 |
| more than $35,350 but not more than $85,650 | $4,867.50 (+) 25% applicable for amounts exceeding $35,350 |
| more than $85,650 but not more than $178,650 | $17,442.50 (+) 28% applicable for amounts exceeding $85,650 |
| more than $178,650 but not more than $388,350 | $43,482.50 (+) 33% applicable for amounts exceeding $178,650 |
| more than $388,350 | $112,683.50 (+) 35% applicable for amounts exceeding $388,350 |
Married but Filing Separate Returns
| Income Amount | Tax Implication and Applicable Rate |
| more than $0 but not more than $8,700 | 10% of taxable income |
| more than $8,700 but not more than $35,350 | $870 (+) 15% applicable for the amounts exceeding $8,700 |
| more than $35,350 but not more than $71,350 | $4,867.50 (+) 25% applicable for amounts exceeding $35,350 |
| more than $71,350 but not more than $108,725 | $13,867.50 (+) 28% applicable for amounts exceeding $71,350 |
| more than $108,725 but not more than $194,175 | $24,332.50 (+) 33% applicable for amounts exceeding $108,725 |
| more than $194,175 | $52,531 (+) 35% applicable for amounts exceeding $194,175 |
Married and Filing Jointly
| Income Amount | Tax Implication and Applicable Rate |
| more than $0 but not more than $17,400 | 10% of taxable income |
| more than $17,400 but not more than $70,700 | $1,740 (+) 15% applicable for the amounts exceeding $17,400 |
| more than $70,700 but not more than $142,700 | $9,735 (+) 25% applicable for amounts exceeding $70,700 |
| more than $142,700 but not more than $217,450 | $27,735 (+) 28% applicable for amounts exceeding $142,700 |
| more than $217,450 but not more than $388,350 | $48,665 (+) 33% applicable for amounts exceeding $217,450 |
| more than $388,350 | $105,062 (+) 35% applicable for amounts exceeding $388,350 |
Heads of Households
| Income Amount | Tax Implication and Applicable Rate |
| more than $0 but not more than $12,400 | 10% of taxable income |
| more than $12,400 but not more than $47,350 | $1,240 (+) 15% applicable for the amounts exceeding $12,400 |
| more than $47,350 but not more than $122,300 | $6,482.50 (+) 25% applicable for amounts exceeding $47,350 |
| more than $122,300 but not more than $198,050 | $25,220 (+) 28% applicable for amounts exceeding $122,300 |
| more than $198,050 but not more than $388,350 | $46,430 (+) 33% applicable for amounts exceeding $198,050 |
| more than $388,350 | $109,229 (+) 35% applicable for amounts exceeding $388,350 |
Make sure that you follow all the instructions for Form 1040 schedule A, while filing your income tax return. When in doubt about the income tax brackets, confirm with the IRS website or with the instructions that are attached to your form. The Bush-era tax cuts got a two-year extension which is supposed to cease in 2012; so let’s see what lies ahead in 2013 for us.
