Today on MoneyWatch
Hottest New Small Cars for 2012
Size matters: The most-anticipated new cars this fall have been a set of smaller models.
IRS boosts maximum 401(k) contribution to $17,000
The increase is required by law to adjust for inflation. The ceiling hadn't grown since 2009 because inflation had been too low to trigger an increase.
Companies that set up 401(k) plans for their employees are free to limit maximum contributions at levels below the legal ceiling, and many do.
Thirty-three percent of workers ages 21-64 used 401(k) plans in 2009, the most recent year for which figures are available, according to the Employee Benefit Research Institute, a nonpartisan research group that advocates strong employee benefit programs.
Only 9 percent of people with a 401(k) contributed the maximum dollar amount to their plans in 2005, the most recent year for which that data is available, the institute said.
The IRS also is making inflation adjustments to the personal exemption, tax brackets and other parts of the tax code for 2012.
The personal exemption and the dependent exemption will grow to $3,800 each, a $100 increase from 2011.
The standard deduction for married couples filing jointly will rise by $300 to $11,900, while the standard deduction for single people will increase by $150 to $5,950. The standard deduction is used by the almost two-thirds of taxpayers who do not itemize deductions for items such as mortgage interest.
Tax brackets will change, too. For married couples filing a joint return, the taxable income at which the rate grows from 15 percent to 25 percent will be $70,700, compared with $69,000 this year.
The changes are all for the 2012 tax year. Most people will file their returns for that year at the beginning of 2013.
___
Online:
IRS: http://tinyurl.com/rxbyd
MoneyWatch TalkbackShare your ideas and expertise on this topic
Market Update
Stocks rise sharply on solid corporate earnings
A broad rally swept through the stock market Friday after McDonald's and several other large companies reported solid earning...
- Eurozone to banks: Take bigger loss on Greek debt
- Earnings Preview: Reynolds American Inc.
- Forum Energy seeks NYSE listing
- Most active New York Stock Exchange-traded stocks
- Constellation Energy declares quarterly dividends
Hot Discussions.
MoneyWatch Blogs
- Jane Bryant Quinn | Make the Most of Your Money
- Jill Schlesinger | Jill on Money
- Jerry Edgerton | Cars and Money
- John Keefe | The Macro View
- Carla Fried | The Daily Money
- Mark Thoma | Maximum Utility
- Stacey Bradford, Sarah Lorge Butler | Family Finance
- Ilyce Glink | Home Equity
- Marlys Harris | The Consumer Reporter
- Dan Kadlec | Bank of Dad
- Kathy Kristof | Devil in the Details
- Lynn O'Shaughnessy | The College Solution
- Farnoosh Torabi | You're So Money
- Ron Brown | Power Plays
- Robert Pagliarini | Your Other 8 Hours
- Amy Levin-Epstein | On the Job
- Matthew Rothenberg | Career Management
- Dan Burrows | Investment Insights
- Conrad deAenlle | Against the Grain
- Nathan Hale | Mutual Fund Insider
- Allan Roth | The Irrational Investor
- Larry Swedroe | Wise Investing
- Charlie Farrell | Retirement Roadmap
- Ray Martin | What Works
- Steve Vernon | Money for Life