2008 Changes
The amount you can deduct for each exemption has increased to $3,500 for 2008.
You lose part of the benefit of your exemptions if your AGI is above a certain amount. The amount at which the phaseout begins depends on your filing status. For 2008, the phaseout begins at:
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$119,975 for married persons filing separately,
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$159,950 for single individuals,
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$199,950 for heads of household, and
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$239,950 for married persons filing jointly or qualifying widow(er)s.
Beginning in 2008, you can lose no more than 1/3 of the dollar amount of your exemptions. In other words, each exemption cannot be reduced to less than $2,333.
If your AGI is more than the amount shown for your filing status, use the Deduction for Exemptions Worksheet in the Form 1040 or Form 1040A instructions to figure the amount you can deduct for exemptions.
Exemption for individual displaced by Midwestern disaster. You may be able to claim a $500 exemption if you provided housing to a person displaced by a Midwestern disaster.
2009 Changes
The amount you can deduct for each exemption has increased to $3,650 for 2009. You lose part of the benefit of your exemptions if your AGI is above a certain amount. The amount at which the phaseout begins depends on your filing status. For 2009, the phaseout begins at:
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$125,100 for married persons filing separately,
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$166,800 for single individuals,
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$208,500 for heads of households, and
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$250,200 for married persons filing jointly or qualifying widow(er)s.
For 2009, each exemption cannot be reduced to less than $2,433.