Dictionary of Business Terms: phaseout of personal exemptions
phaseout of personal exemptions
reduction in personal exemptions as income rises. Taxpayers whose Adjusted Gross Income exceeds a prescribed threshold must reduce or eliminate the deduction for personal exemptions to which they would otherwise be entitled. For 2006, the thresholds were $225,750 for married individuals filing joint returns, $150,500 for heads of households, $188,150 for unmarried individuals, and $112,875 for married individuals filing separate returns. For subsequent years, these threshold amounts will be indexed for inflation. This phaseout is itself being phased out between 2006 and 2009. After 2009, this phaseout will be repealed.
