What are the AGI limits that result in "Phaseout of Exemptions" in 2007?
Phaseout of Exemptions
The amount a taxpayer can claim as a deduction for exemptions is reduced once the adjusted gross income (AGI) goes above a certain level for your filing status. For tax year 2007, the IRS established the following AGI levels that reduce the exemption are as follows:
Married filing separately -- $117,300
For Single filing status ----- $156,400
For Head of household -----$195,500
For Married filing jointly --- $234,600
For Qualifying widow(er)--- $234,600
The Taxpayer must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status.
Fortunately, the IRS has stipulated that taxpayers cannot lose more than 2/3 of the dollar amount of your exemptions. Thus, for highly paid taxpayers, each exemption cannot be reduced to less than $1,133.