My apologies, I understand what you need to know now.
For 2011 and 2012, higher-income individuals
are not subject to the “Pease limitation
,” which reduced the available itemized deductions
for those with income above a threshold. The adjusted gross income
(AGI) threshold was set at $100,000 ($50,000 for married, filing separately) in 1991. The threshold is adjusted annually for inflation. Beginning in 2013, the Pease limitation is scheduled to return.
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The limitation on itemized deductions—known as Pease after the congressman who introduced it—cuts itemized deductions by 3 percent of adjusted gross income above specified thresholds but not by more than 80 percent. The income threshold—projected to be $174,450 in 2013 ($87,225 for married couples filing separately)—is indexed for inflation.
The president proposes to allow both PEP and Pease to resume for high-income taxpayers in 2013 but would markedly change the income levels above which the provisions apply. The threshold for the phaseouts would begin at 2009 levels of $250,000 for couples*and $200,000 for other taxpayers, with both values indexed for inflation. TPC estimates that 2013 thresholds would be $261,450 for couples, $209,150 for single filers, $235,300 for heads of household, and $130,725 for couples filing separately. Personal exemptions
would thus phase out at incomes between $261,450 and $383,950 for joint filers, between $209,150 and $331,650 for single filers, and between $235,300 and $357,800 for heads of household.**Taxpayers would have their itemized deductions reduced in 2013 by 3 percent of their income over the same thresholds but not by more than 80 percent. Both phaseouts would increase marginal tax rates
for taxpayers in the affected income ranges. The increase would jump irregularly for PEP, depending on the number of exemptions a taxpayer claims. Pease would increase the marginal tax rate of affected taxpayers by 3 percent of their bracket rate
: 36 percent would go to 37.08 percent, and 39.6 percent would rise to 40.79 percent.