Sam and Elizabeth Jefferson file a joint return They have th

Sam and Elizabeth Jefferson file a joint return. They have three children, all of whom qualify as dependents. If the Jeffersons reports 2017 AGI of $335,900, what is their allowable deduction for personal and dependency exemptions?

When computing the reduction factor, round the amount up to the next whole number and use in subsequent computations.

Filing Status Married, filing jointly Head of household Single Married, filing separately 2016 $311,300 285,350 259,400 155,650 2017 $313,800 287,650 261,500 156,900

Solution

Exemption amount = 4050*5= 20250 AGI in excess of Phaseout threshold = (335900-313800)= 22100 Reduction factor = 22100/2500= 9 Reduction amount = 9*2% = 18% Allowable Deduction for personal and dependency exemption = 20250-(20250*18%)= 16605