The alternative minimum tax, or AMT, for instance, has been patched permanently, and several tax credits and deductions that technically expired at the end of 2011 were extended as part of the fiscal cliff legislation that Congress passed and President Barack Obama signed into law in January.
But the delay in congressional action could mean confusion for some taxpayers.
That could make going it alone on tax day costly. Experts say people should seek some guidance, whether its from a professional tax preparer, up-to-date software programs or tax guides, before filing returns.
The Internal Revenue Service will begin accepting returns Jan. 30, an eight-day delay necessitated by the late congressional action. The agency said most taxpayers more than 120 million households would be able to begin filing Jan. 30. But filing for those claiming energy credits, depreciation of property or general business credits will be delayed until late February or March.
Here are some of the key things you should be aware of:
Each personal exemption is worth $3,800 this year, up from $3,700 in 2011. Look expansively at dependents beyond your children younger than 19, or 24 if in college. For example, if youre paying more than half the support for your parents and their taxable income is less than the $3,800 exemption, you might be able to claim them as dependents even if theyre not living in your own home.
Single taxpayers with qualified children or relatives as dependents also may be able to use head of household filing status, which is more advantageous to the taxpayer.
Capital gains rates are unchanged from 2011 a maximum of 15 percent for assets held more than a year.
Originally set up to make sure millionaires were paying taxes, the AMT was ensnaring increasing numbers of middle-class taxpayers. To avoid that, the tax has been adjusted for inflation every year, but the last patch expired at the end of 2011. The new law means that going forward, it will be indexed according to inflation.
The fiscal cliff bill also extends the $1,000 tax credit per child, the expanded earned income tax credit and the credit for adopting a child.
The American Opportunity Tax Credit can be worth up to $2,500 for college tuition. The credit, which can be claimed for each of the first four years of college, was extended through 2017.
Elementary and secondary school teachers will still be able to deduct up to $250 of their out-of-pocket expenses for the classroom.
Knowing what tax credits and benefits youre eligible for is key. No one wants to pay more than is required in taxes.