With tax day fast approaching, it's important to be aware of certain limitations that may affect your tax liability. Do you know what the income threshold is for married couples filing jointly who wish to itemize their deductions (i.e., the Pease limitation)?
The Pease limitation was reintroduced to the Internal Revenue Code by the American Taxpayer Relief Act of 2012. It reduces itemized deductions by the lesser of 3 percent of the amount by which the taxpayer's adjusted gross income exceeds the income threshold, or 80 percent of the amount of the itemized deductions otherwise allowable for the tax year. For married couples filing jointly, the threshold is $311,300 in 2016.
If you have questions about how you might reduce the impact of the Pease limitation in future tax years, contact us today.