J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible

APPENDIX A

Items Adjusted Annually for Inflation

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

Law changes are 1 important way in which write-off amounts and restrictions on them change each year. But another, less obvious way is adjustments to certain amounts and limits reflecting cost-of-living changes. Not all items subject to adjustment actually change each year, but the list of the items subject to change continues to grow.

To help you plan your taxes for the future, it's helpful to know that certain limits affecting exclusions, deductions, and credits are raised in step with increases in the cost of living (although some items may be adjusted downward if the times demand it). The following exclusions, deductions, and credits are subject to annual adjustments for inflation.

401(k) 403(b), and 457 plan elective deferrals.

accelerated death benefits daily dollar amount that can be paid tax free from a life insurance policy on account of chronic illness.

adoption assistance programs the maximum dollar amount and AGI phaseout range.

adoption credit the maximum dollar amount and the AGI phaseout range.

Archer medical savings accounts the definition of a high-deductible plan (i.e., the range for an annual deductible) and the limit on out-of-pocket costs. ...