Phase-Outs Eliminated in 2010

The high income phase-outs for itemized deductions and personal exemptions have been repealed for 2010.

Itemized deductions are expenses an individual taxpayer can report on their tax returns to reduce taxable income.  A personal exemption is a stated amount allowed by the government to reduce taxable income.  Individuals are allowed to claim a personal exemption for themselves and one for each dependent they support.

Both itemized deductions and personal exemptions are subject to phase-out limits.  In other words, if your income exceeds certain thresholds both the itemized deduction and your personal exemptions will be reduced.  In 2010, however, those income limits have been repealed but are scheduled to resume in 2011.