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The Limit on Itemized Deductions

Unfortunately, at higher levels of income, your hard-won and carefully documented 2014 itemized deductions will be partially phased out, and you won't be able to deduct them in the current year -- or ever.

Taxpayers with adjusted gross income (AGI) over a threshold amount must reduce their itemized dedcutions by the lesser of:

  1. 3% of the amount of the AGI above the threshold amount; or
  2. 80% of allowable itemized deductions affected by this overall limit.
Tip

Tip

Regardless of whether your itemized deductions are phased out, you always have the option of using the standard deduction for your filing status, which remains the same no matter how high your income rises.


The adjusted gross income (AGI) levels at which the phaseout of itemized deductions begins are adjusted annually for inflation. For 2014, they are:

  • $305,050, for married people filing jointly;
  • $152,525, for marrieds filing separately;
  • $279,650, for head of household; and
  • $254,200, for single taxpayers.

If your AGI as shown on Line 37 of your tax return is higher than the applicable threshold, you have to subtract the threshold amount from your income. The remaining amount of AGI is multiplied by 3 percent. The answer you get is subtracted from the total amount of affected deductions, and you can only deduct the remainder. However, in no event will your deductions be reduced by more than 80 percent of their value.


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