To taxpayers who have faithfully filed tax returns for years, it may be surprising to find that they may not have to file. Generally, you do not need to file a tax return if your income is under these amounts:

Filing Status	Federal		Arizona resident
	Under age 65	65 or older	Under 65	No tax*
Single	$9,750	$11,200	$5,500	$8,482
Head of Household	$12,500	$13,650	$5,500	$19,264
Married filing jointly	$19,500	$21,800	$11,000	$116,964
Married filing separately	$3,800	$3,800	$5,500	$8,482
Widow(er) with qualifying dependent	$15,700	$16,850	--	--

However... you must file a return if you had self-employment income of $400 or more.

Or, you should file if someone else (like your parents) could claim you as a dependent and you earned over $900 or had investment income (interest on savings, stock dividends, etc.) of more than $300.

Also, you should file a return even if your income is under these limits if you:

• Had withholding on wages, pensions, retirement distributions or investment accounts.
• Are eligible for an earned income credit or other credit.

You may be required to file a state return even if you don't have to file a federal one. There are other circumstances where you might be required to file, or it might be beneficial to file, so check with an Enrolled Agent to be sure.

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Personal exemptions

Personal exemptions for 2012 are $3,800 per person. You are entitled to claim one exemption apiece for yourself, your spouse if married, and each dependent you can claim. If someone else (such as your parent) claims you as a dependent, you cannot take an exemption for yourself.

In Arizona, personal exemptions are figured differently. A single person or a married person filing separately gets a personal exemption of $2,100. A married couple filing jointly or a single head of household has a personal exemption of $4,200. Dependent exemptions are $2,300 per person.

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Standard deductions

The IRS excludes from your taxable income a specified amount of expenses, called a "standard deduction." If your actual expenses in the allowed categories total more than the standard deduction amount, you may deduct those actual expenses, which is called "itemizing." If your itemized deductions are less than the standard amount, you are better off to use the standard deduction.

2012 Filing Status	Federal	Over 65	Arizona
Single	$5,950	$7,400	$4,833
Head of Household	$8,700	$13,350	$9,665
Married filing jointly	$11,900	$14,200	$9,665
Married filing separately	$5,950*	$7,100*	$4,833
Widow(er) with qualifying dependent	$11,900	$12,750	--
Dependent of someone else	$650/$950	$650/$950 @	$2,100

* Only if spouse does not itemize; otherwise $0
# Amounts are indexed annually; Arizona has not yet released annual adjustments
@ Standard deduction for dependents is $650, unless earned income (not investments) more than $650

2011 Filing Status	Federal	Over 65	Arizona
Single	$5,800	$7,250	$4,703
Head of Household	$8,500	$9,950	$9,406
Married filing jointly	$11,600	$13,900	$9,406
Married filing separately	$5,800*	$6,950*	$4,703
Widow(er) with qualifying dependent	$11,600	$12,750	--
Dependent of someone else	$650/$950	$650/$950	$2,100

* Only if spouse does not itemize; otherwise $0
@ Standard deduction for dependents is $650, unless earned income (not investments) more than $650

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Tax brackets

2012 Federal Tax bracket	Single	HOH	MFJ or QW	MFS
	For income over...
10%	$0	$0	$0	$0
15%	$8,700	$12,400	$17,400	$8,700
25%	$35,350	$47,350	$70,700	$35,350
28%	$85,650	$122,300	$142,700	$71,350
33%	$178,650	$198,050	$227,450	$108,725
35%	$388,350	$388,350	$388,350	$194,175

The federal Form 1040 actually collects several other taxes including:

• Self employment (Social Security and Medicare) tax
• Social Security and Medicare tax on tip income
• Early withdrawal tax on IRA's and retirement plans
• Household employee payroll tax ("nanny tax")
• Alternative minimum tax



2011 Federal Tax bracket	Single	HOH	MFJ or QW	MFS	Estate
	For income over...
10%	$0	$0	$0	$0	N/A
15%	$8,500	$12,150	$17,000	$8,500	$0
25%	$34,500	$46,250	$69,000	$34,500	$2,300
28%	$83,600	$119,400	$139,350	$69,675	$5,450
33%	$174,400	$193,350	$212,300	$106,150	$8,300
35%	$379,150	$379,150	$379,150	$189,575	$11,350

Arizona tax brackets:




Arizona		Tax bracket
Status	Income over	2012
Single or MFS	$0	2.59%
	$10,000	2.88%
	$25,000	3.36%
	$50,000	4.24%
	$150,000	4.54%
MFJ or HOH	$0	2.59%
	$20,000	2.88%
	$50,000	3.36%
	$100,000	4.24%
	$300,000	4.54%

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Mileage rates

Standard mileage rates may be used as an alternative to deducting actual expenses. The standard mileage rate must be claimed the first year a vehicle is used for deductible purposes; you cannot change to it once you have started claiming actual expenses. To deduct either mileage or actual expenses, you must have a written record for each trip showing:

Retirement plan limits

Taxpayers age 50 and older may contribute a higher amount to retirement plans to "catch up," regardless of whether or they had contributed the maximum amounts earlier in life.

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Estate and gift tax exemption

Your estate will have to pay taxes if its net value when you die is more than the "exempt" amount set by Congress. The exemption amount is reduced by any gifts throughout the lifetime of more than the annual gift tax exclusion limit. The gift exclusion is per donor and per recipient, so a married couple can exlcude gifts up to double the amount shown in the chart to a child, for instance. Making a gift of more than the annual exclusion does not trigger immediate taxes, only the need to file a gift tax Form 709.

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