The American Taxpayer Relief Act of 2012 (ATRA) was enacted in early 2013. Don’t you like the way new tax law is titled, Taxpayer Relief Act? At least they try to make you feel good.
Many of the provisions in ATRA were retroactive to 2012, yet many take effect in 2013. Following are some of the tax law changes with the passing of ATRA.
The Alternative Minimum Tax (AMT) exemption was raised to $78,750 for joint filers and $50,600 for single filers. More importantly, Congress made these amounts permanent with indexing for inflation. This tax was put in place to add an additional tax on high incomes, but was catching more middle income earners the past few years.
The basic exemptions amounts have never been increased, and Congress was always pressed at the last minute to put in temporary increased exemptions amounts at the end of every tax year. There is a phase-out of the exemption...