Taxpayers for many years have had to lose a good portion of the value of personal exemptions
and itemized deductions when their incomes rise above certain levels, which have also been adjusted for inflation.
The standard deduction ($14,200) and personal exemptions
($3,800) per person for a couple over age 65 filing jointly is $21,800.
reductions: Reinstated were limitations on itemized deductions and personal exemptions
for taxpayers with taxable incomes greater than $250,000 ($300,000 for married couples).
: The personal exemption
amount for single, separate and head of household taxpayers increased from $102 to $104 for the 2012 tax year.
He was one of two people who sponsored a bill supported by the Campaign for Our Communities, a group of 120 organizations including the Massachusetts Teachers Association, that would increase income tax rates and increase personal exemptions
Individual Income Tax: Personal Exemptions
Here's why: A married couple retiring today, absent any other tax deductions, would have a standard deduction plus personal exemptions
that would total $18,700.
A closer look shows that the savings result primarily from the mechanics of the phaseouts of personal exemptions
and Pease limitations on itemized deductions and AMT exemptions, combined with lower ordinary income tax rates in 2008 and 2009.
The new law also provides increased personal exemptions
for other employees.
In 2002 and 2003, their total personal exemptions
fell to 14.
In addition to broadening the tax base, the plan increased standard deductions and personal exemptions
to the point that no family with an income below the poverty line would have to pay federal income tax.
Gross Income $80,000 Less: Standard Deduction 7,350 Personal Exemptions
5,600 Taxable Income $67,050 Tax Liability $13,081