3% Reduction Rule
- It reduces the value of itemized deductions for wealthy households by 3 percent of a taxpayer’s income above a certain threshold. Applies to individual taxpayers with incomes of $250,000 or more, heads of households at $275,000, and married couples filing a joint return with incomes above $300,000.
- If a taxpayer, married filing jointly, declared $500,000 of taxable income in 2013, his excess income is $500,000-$300,000= $200,000. 3% of $200,000 is $6,000. Therefore if this taxpayer declared $50,000 in itemized deductions, he would be able to deduct only $44,000.
- The reduction is not unlimited however. The reduction cannot eliminate more than 80% of the donor’s itemized deductions. If this taxpayer declared only $7,000 in itemized deductions (not likely for a taxpayer with a $500,000 income), his itemized deductions appear to be reduced by $6,000 to only $1,000. But since the reduction in the value of deductions cannot exceed 80 percent of the total deductions he can still deduct $5,600 of itemized deductions because 80% of $7,000 is $5,600.
February Pre-Marathon Runner’s Injury Screenings
Come to one of our free runner’s screenings where you will be assessed by a physical therapist and given appropriate treatment recommendations as they relate to your goals.
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Wellness Center Classes
Did you know we offer a variety of exercise and fitness classes designed to accommodate various levels and abilities? Many of our classes are starting this January. Our schedule is available for you to view.
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