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A taxpayer can only deduct the amount of miscellaneous itemized deductions that exceed 2% of their adjusted gross income. [6] For example, if a taxpayer has adjusted gross income of $50,000 with $4,000 in miscellaneous itemized deductions, the taxpayer can only deduct $3,000, since the first $1,000 is below the 2% floor.
Personal exemption. Under United States tax law, a personal exemption is an amount that a resident taxpayer is entitled to claim as a tax deduction against personal income in calculating taxable income and consequently federal income tax. In 2017, the personal exemption amount was $4,050, though the exemption is subject to phase-out limitations.
Adjusted gross income is gross income less deductions from a business or rental activity and 21 other specific items. Several deductions (e.g. medical expenses and miscellaneous itemized deductions) are limited based on a percentage of AGI. Certain phase outs, including those of lower tax rates and itemized deductions, are based on levels of AGI.
(The "line" these deductions refer to is a literal line on your 1040 form for the Adjusted Gross Income.) Below the Line Deductions ... The standard deduction is an amount of income that the ...
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According to tax pros, itemizing generally only makes sense if your itemized deductions, taken together, add up to more than the current standard deduction of $13,850 for a single filer and ...
The standard deduction amount varies by taxpayer filing status. Itemized deductions by individuals include home mortgage interest, state and local taxes, certain other taxes, contributions to recognized charities, medical expenses in excess of 7.5% of adjusted gross income, and certain other amounts.
See above for amounts of this exemption and phase-out points. Due to the phase-out of exemptions, the actual marginal tax rate (1.25*26% = 32.5%) is higher for the income above the phase-out point. The married-filing-separately (MFS) phase-out does not stop when the exemption reaches zero, either in 2009 or 2010.
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