What are the deductions that are bracket sensitive? IOW-the more you make, the smaller percentage you’re allowed to deduct?
This appears to be a factual question, so I’m moving it to GQ from Elections.
One is Passive Active Loss. Fully deductable up to $25,000 a year until the modified adjusted gross income reaches $100,000.Then for every $2.00 over $100,000 the amound that you can deduct is reduced by $1.00. So at !50,000 you can not deduct any loss. there are exceptions, the one I know of is for real estate professionals.
There are many deductions and credits that higher income taxpayers are not eligible for. The poster abover mentioned passive activity losses, which include rental losses.
Others include: the Child Tax Credit, Student Loan Interest deduction, IRA deduction, Hope and Lifetime Learning education credits, Dependent Care credit, Adoption credit, Tuition and Fees deduction, and a reduction in the AMT (Alternative Minimum Tax) exemption.
Those are just the ones off the top of my head as a practicing CPA, i am sure there are others.
Thanks Nothar. BTW-I started this in Election because taxes have political implications usually.
There are also many deductions that have a floor set by income. These don’t expire per se, but the rich get a smaller benefit (if any) because you only deduct the amount above the floor. Medical expenses (7.5% of AGI, soon to be 10%), Employee/Investment/Other itemized deductions (2% of AGI) and personal theft/casualty losses (10% of AGI) are three examples.