The IRS has issued some announcements on updated regulations for 2012, and there is some good news in there for retirement savings. The limit on 401(k)s has been raised from $16,500 this year to $17,000 next year, so you will be able to put away another $500 tax-free. That applies to 403(b) plans, for people who work for nonprofits, as well.
There are also some cost-of-living adjustments that should provide a small amount of tax relief for high-income taxpayers. The personal exemption will rise from $3,700 to $3,800, and the standard deduction for married couples will go up from $11,600 to $11,900. And the 35 percent top bracket will now apply to incomes of $388,350 and higher, up from $379,150 this year.
There is also some small movement on the estate tax, which his been a moving target for the past few years. The exemption will be raised to $5.12 million next year, up from $5 million. But be warned: At this point, that exemption is scheduled to drop back to $1 million at the end of 2012, unless more legislation is passed.
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