The IRS has released new inflation-adjusted amounts for 2012. For tax years beginning in 2012, some of the more commonly applicable inflation adjustments, which may apply to many individual returns, are:

•    Kiddie tax. For purposes of determining whether a child’s unearned income is taxed at the parent’s tax rate under Code Sec. 1(g), the amount by which the child’s net unearned income is reduced remains at $950. The child’s income can be reported on the parent’s return if the child’s gross income is more than $950, and less than $9,500. The exemption amount for purposes of the alternative minimum tax cannot exceed the sum of the child's earned income for the tax year, plus $6,950.

•    Adoption credit. For an adopted child with special needs, the Code Sec. 23 adoption credit allowed is $12,650. For other adoptions, the credit is equal to the amount of qualified adoption expenses up to $12,650. The credit begins to phase out for taxpayers whose modified adjusted gross income (AGI) exceeds $189,710, and are completely phased out when modified AGI reaches $229,710.

•    Adoption assistance programs. The amount that can be excluded under Code Sec. 137(a)(2) from an employee’s gross income for the adoption of a child with special needs is $12,650. This is also the amount excludable under Code Sec. 137(b)(1) from an employee’s gross income for the amounts paid or expenses incurred by an employer for qualified adoption expenses furnished pursuant to an adoption assistance program for other adoptions by the employee. The exclusion begins to phase out for taxpayers with MAGI above $189,710, and is completely phased out when MAGI reaches $229,710.

•    Child tax credit. For tax years beginning in 2012, the value used in Code Sec. 24(d)(1)(B)(i) to determine the amount of credit that may be refundable is $3,000.

•    Education credits. The Hope Scholarship Credit under Code Sec. 25A(b)(1), as increased under Code Sec. 25A(i) (the American Opportunity Tax Credit), is 100 percent of qualified tuition and related expenses of up to $2,000, plus 25 percent of excess expenses not above $4,000. Thus, the maximum Hope Scholarship Credit allowable is $2,500.

•    A taxpayer’s modified adjusted gross income (MAGI) above $80,000 ($160,000 for a joint return) is used to determine the reduction under Code Sec. 25A(d)(2) in the amount of Hope Scholarship Credit otherwise allowable. A taxpayer’s MAGI above $52,000 ($104,000 for a joint return) is used to determine the reduction under Code Sec. 25A(d)(2) in the amount of Lifetime Learning Credit otherwise allowable.

•    Earned income credit. The maximum earned income tax credit (EITC) under Code Sec. 32(b) for low- and moderate-income workers and working families rises to $5,891 for 2012, up from $5,751 in 2011. The maximum income limit for the EITC rises to $50,270, up from $49,078 for 2011. The EITC is not allowed if the aggregate amount of certain investment income exceeds $3,200.

•    Low-income housing credit. The amount used to calculate the 2012 state housing credit ceiling for the low-income housing credit under Code Sec. 42(h)(3)(C)(ii) is the greater of $2.20 multiplied by the state population or $2,525,000.

•    Standard deduction. The standard deduction amounts under Code Sec. 63(c)(2) for 2012 are $11,900 (married filing jointly, surviving spouses), $8,700 (head of household), and $5,950 (unmarried and married filing separately). The standard deduction that can be claimed as a dependent by another taxpayer cannot exceed the greater of $950 or the sum of $300 plus the individual’s earned income. The additional standard deduction amount for the aged or blind is $1,150 ($1,450 if the individual is also unmarried and not a surviving spouse).

•    Personal exemption. The value of each personal and dependent exemption under Code Sec. 151(d) increases to $3,800 for 2012, up from $3,700 in 2011.

•    Qualified transportation fringe benefit. The monthly limitation under Code Sec. 132(f)(2)(A) for the exclusion amount for transportation in a commuter highway vehicle, and any transit pass, is $125. The exclusion for qualified parking has a monthly exclusion amount of $240.

•    Savings bond education exclusion. The exclusion under Code Sec. 135 for taxpayers who pay qualified higher education expenses begins to phase out for MAGI above $109,250 for joint returns and $72,850 for other returns. The exclusion phases out completely at MAGI levels of $139,250 for joint returns and $87,850 for other returns.

•    Expensing of depreciable assets. The aggregate cost of any Code Sec. 179 property a taxpayer may elect to treat as an expense cannot exceed $139,000. This limitation is reduced by the amount the cost of Code Sec. 179 property placed in service during the 2012 tax year exceeds $560,000.

•    Long-term care premiums. The limitations under Code Sec. 213(d)(10) regarding eligible long-term care premiums includible in the term "medical care" are $350 (attained age of 40 or less before close of tax year), $660 (41-50), $1,310 (51-60), $3,500 (61-70) and $4,370 (over 70).

•    Foreign earned income exclusion. The foreign earned income exclusion amount under Code Sec. 911(b)(2)(D)(i) is $95,100.

•    Estate and gift taxes. The basic exclusion amount used to determine the amount of the unified credit against the estate tax under Code Sec. 2010, for an estate of a decedent dying in 2012, is $5,120,000. The annual gift tax exclusion from the total amount of taxable gifts made under Code Sec. 2503 remains at $13,000.

•    Property exempt from levy. The value of property exempt from levy under Code Sec. 6334(a)(2) (fuel, provisions, furniture, other household personal effects, arms for personal use, livestock and poultry) cannot exceed $8,570. The value of property exempt from levy under Code Sec. 6334(a)(3) (books and tools necessary for the trade, business or profession of the taxpayer) cannot exceed $4,290.

These inflation-adjusted figures generally apply to tax years beginning in 2012, except for certain specified figures that apply to transactions or events occurring in calendar year 2012.

All of the tax-bracket thresholds in 2012 for each filing status have increased slightly from those in 2011. This is true of brackets applicable to estates and trusts, as well as those applicable to individuals. The net effect is a widening of the tax brackets for 2012.