Stealth Tax Increase for 2013 Income Tax Filers: The Personal Exemption Phase-out

JC Leahy, MA Accounting
Twitter@TaxHelpWhenNeed

Under the Clinton Administration, personal and dependency exemptions were reduced by 2% for every $2,500 that AGI exceeded a variety of AGI thresholds.  This provision returns for tax year 2013, but with different thresholds.  The new thresholds conform to the thresholds for itemized deduction phase-out. 

Beginning in 2013, personal and dependency exemptions will be reduced by 2% for every $2,500 that AGI exceeds these thresholds:

• Married, joint                                 $300,000
• Head of Household                         275,000
• Single                                            250,000
• Married separate                           150,000