Announcing changes that will likely affect wealth managers helping clients with tax planning, the IRS said earlier this week that many tax benefits for the 2012 tax year will increase due to inflation adjustments. That includes personal exemptions and standard deductions, with tax brackets also widening next year.
By law, the dollar amounts for various tax provisions, affecting virtually every taxpayer, must be revised each year to keep pace with inflation. The IRS also increased retirement plan contribution limits on Thursday due to cost-of-living adjustments tied to inflation (see IRS Increases Retirement Plan Contribution Limits).New dollar amounts affecting 2012 returns, filed by most taxpayers in early 2013, include the following:
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