You can take an exemption deduction for yourself, your spouse and each dependent you claim. On 2009 returns, this exemption amount is $3,650 per person.Bankrate's 2010 Tax GuideTax tips and toolsHow do I … ?Filing and refundsReal estate and capital gainsFamily and educationOn the jobInvestments and retirementCharitable givingYour state taxes<< All guide contentSome taxpayers, however, will see their personal exemption amount reduced if they make over a certain limit that is adjusted annually for inflation.To determine just how much exemption value is lost, taxpayers will have to complete a work sheet found in the tax return filing instructions.You will need the work sheet if your adjusted gross income exceeds the following limits for your filing status:You must reduce the dollar amount of your exemptions by 2 percent for each $2,500 or part of $2,500 ($1,250 if you are married filing separately) that your AGI exceeds the amounts shown above for your filing state.However, the maximum income limit is not a total elimination of your exemption amount. Rather, if your income is more than the top phaseout range, you will lose one-third of each allowable exemption amount. That means that you will be able to claim only $2,433 instead of $3,650 for each exemption.2009 exemption amount income limitsFiling statusPhaseout of exemptions when AGI is overMaximum phaseout applies if your AGI exceedsMarried filing jointly or qualifying widow(er)$250,200$372,700Head of household$208,500$331,000Single$166,800$289,300Married filing separately$125,100$186,350<< Back to Bankrate's 2010 Tax guide table of contents. Create a news alert for "taxes"advertisementRelated Links:Avoiding an early SEP IRA withdrawal penaltyHow to give a tax-free gift5 tax moves to make now Related Articles:Tricky 401(k) rulesTasty tax tips for 2011Tax Form 2106-EZ
You can take an exemption deduction for yourself, your spouse and each dependent you claim. On 2009 returns, this exemption amount is $3,650 per person.
Some taxpayers, however, will see their personal exemption amount reduced if they make over a certain limit that is adjusted annually for inflation.
To determine just how much exemption value is lost, taxpayers will have to complete a work sheet found in the tax return filing instructions.
You will need the work sheet if your adjusted gross income exceeds the following limits for your filing status:
You must reduce the dollar amount of your exemptions by 2 percent for each $2,500 or part of $2,500 ($1,250 if you are married filing separately) that your AGI exceeds the amounts shown above for your filing state.
However, the maximum income limit is not a total elimination of your exemption amount. Rather, if your income is more than the top phaseout range, you will lose one-third of each allowable exemption amount. That means that you will be able to claim only $2,433 instead of $3,650 for each exemption.
<< Back to Bankrate's 2010 Tax guide table of contents.
Create a news alert for "taxes"