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Tax.appeal.168
Tax.appeal.168, Tax Accountant
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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how much money do you need to make to be able to itemize on

Resolved Question:

how much money do you need to make to be able to itemize on your tax return
Submitted: 4 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 4 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.



If your actual expenses exceed the standard deduction, you'll be better off itemizing. You standard deduction will depend on your filing status. SEE BELOW for standard deduction amounts.

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The 2011 standard deduction amounts are as follows:

$5,800 for unmarried taxpayers or married taxpayers filing separately,
$11,600 for married taxpayers filing jointly, and


$8,500 for taxpayers filing as head of household.

The additional standard deduction allowed for blind taxpayers and taxpayers age 65 or older at the end of the tax year will be $1,150 if married filing jointly and $1,450 if single.

Please let me know if I can be of further assistance to you regarding this matter.

Thank you.
Customer: replied 4 years ago.
how much money can you make before you go over the limit and aren't able to itemize on your 2012 tax return?
Expert:  Tax.appeal.168 replied 4 years ago.
Hello again,

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.

LINK TO REFERENCE SOURCE:

http://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2011/Tax/TaxOutlookfor2012.jsp

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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.

REFERENCE SOURCE:

http://www.taxpolicycenter.org/taxtopics/2012-Budget-Reinstate-Personal-Exemption-Phaseout-and-Limitation-on-Itemized-Deductions.cfm
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