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Lincoln and Shabona Park are married and have one child, Grant. The Parks file a joint return and have a joint adjusted gross income of $264,700. They claim three exemptions. The reduction of the Parks' exemptions for 2009 will be calculated as follows:
| Adjusted gross income |
$ 264,700 |
| Less: threshold for joint filers |
- 250,200 |
| Amount exceeding threshold |
$ 14,500 |
The $14,500 figure is divided by $2,500 to reach the result of 5.8. Rounding up 5.8 to the nearest whole number gives us 6. 6 x 2% = 12%. Then 12% is divided by 3 to arrive at 4%, which is the percentage of their exemptions that the Parks will lose.
Because the Parks would have an unreduced exemption amount of 3 x $3,650, or $10,950, for 2009, and 4% x $10,950 = $438, the Parks may claim exemptions of only $10,512 ($10,650 - $438).
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