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Gift & Estate Taxes for 2012

NOTE This information is out of date. See a listing of recent tax-related articles for more current information about taxes and their fundraising implications.

The gift tax annual exemption will remain at $13,000 for 2012. Pursuant to the IRC, the exemption can rise only when the inflation adjustment produces an increase of $1,000 or more.

In 2012, the applicable unified estate and gift tax exclusions will rise to $5,120,000, a $120,000 increase from 2011. The estate and gift tax is scheduled to revert to pre-2001 levels in 2013 without further congressional action.

Personal Exemptions in 2012

NOTE This information is out of date. See a listing of recent tax-related articles for more current information about taxes and their fundraising implications.

The amount of personal and dependency exemptions for 2012 will increase to $3,800 from the 2011 level of $3,700.

Standard Deduction for 2012

NOTE This information is out of date. See a listing of recent tax-related articles for more current information about taxes and their fundraising implications.

The 2012 standard deduction will increase for all taxpayers. The standard deduction amounts for 2012 will be $5,950, for single taxpayers; $8,700, for heads of households; $11,900, for married taxpayers filing jointly and surviving spouses; and $5,950, for married taxpayers filing separately. The standard deduction for dependents holds at $950 (or earned income plus $300).

Tax Brackets for 2012

NOTE This information is out of date. See a listing of recent tax-related articles for more current information about taxes and their fundraising implications.

Joint returns. For married taxpayers filing jointly and surviving spouses, the maximum taxable income subject to the 10-percent bracket will rise from $17,000 in 2011, to $17,400 in 2012; the top of the 15-percent tax bracket will increase from $69,000 to $70,700. The bracket amounts for the remaining tax rates will show similarly proportionate increases: $142,700 as the maximum for the 25-percent bracket (up $3,350 from 2011); $217,450 for the 28-percent bracket (up $5,150 from 2011); and $388,350 for the 33-percent bracket (up $9,200 from 2011). Amounts above the $388,350 level will be taxed at the 35-percent rate.

Unmarried filers. For single taxpayers, the maximum taxable income for the 10-percent bracket will increase to $8,700 for 2012 (up from $8,500 in 2011). The remainder of the rate brackets show inflation increases of: $850 for the top of the 15-percent bracket (to $35,350); $2,050 for the 25-percent bracket (to $85,650); $4,250 for the 28-percent bracket (to $178,650); and $9,200 for the top of the 33-percent bracket (to $388,350).

Married filing separately. Married taxpayers filing separately will see a $200 increase for the upper limit of the 10-percent bracket (to $8,700) and an $850 increase for the 15-percent bracket (to $35,350). The top of the 25-percent bracket will increase by $1,675 (to $71,350); the top of the 28-percent bracket will increase by $2,575 (to $108,725); and the top of the 33-percent bracket will increase by $4,600 (to $194,175).

Heads of household. For heads of households, the maximum taxable income for the 10-percent bracket will see a $250 increase from $12,150 in 2011 to $12,400 in 2012. The top of the remainder of the bracket amounts will increase as follows: up $1,100 from 2011 for the 15-percent bracket, to $47,350; up $2,900 from 2011 for the 25-percent bracket, to $122,300; up $4,700 from 2011 for the 28-percent bracket, to $198,050; and up $9,200 from 2011 for the top of the 33-percent bracket, to $388,350.

Estates and trusts. For estates and nongrantor trusts, there will be a slight increase in all the rate bracket amounts from 2011 levels as follows: up $100 from $2,300 in 2011 to $2,400 in 2012 for the 15-percent bracket; up $150 from 2011 for the 25-percent bracket, to $5,600; up $200 from 2011 for the 28-percent bracket, to $8,500; up $300 from 2011 for the 33-percent bracket, to $11,650.

Estate Tax Exemption Increased

NOTE This information is out of date. See a listing of recent tax-related articles for more current information about taxes and their fundraising implications.

The IRS announced the estate tax exemption for 2012 will be $5.12 million (see news release), up from $5 million this year. The higher threshold is scheduled to expire at the end of 2012, and the $1 million limit under previous law is set to return. The annual exclusion for the gift tax will be $13,000, unchanged from 2011.