Last-Minute Fiscal Cliff Deal Produces Permanent Tax Relief for Many Taxpayers

In the waning hours of January 1, Congress passed the American Taxpayer Relief Act (ATRA) of 2012 as part of an effort to resolve the fiscal cliff dilemma. ATRA permanently extends the lower tax rates on individuals with income of $400,000 or less, heads of households with income of $425,000 or less, and married taxpayers with incomes of $450,000 or less. ATRA also increases the alternative minimum tax exemption amounts for 2012 to $50,600 (individuals), $78,750 (married filing jointly and surviving spouse), and $39,375 (married filing separately), and indexes the exemption and phaseout amounts thereafter. The following is a summary of the more important provisions of the new law. H.R. 8