Lila and Ted are married and have AGI of $337,000 in 2016.They had their first children this year,twins.Lila and Ted will be allowed a deduction for personal and dependency exemptions of
A)$8,100.
B)$16,200.
C)$12,636.
D)$6,318.

Question

Quizplus · Accepted Answer

In 2016, the personal exemption amount was $4,050 per person. Lila and Ted have four exemptions (themselves and their two children), totaling $16,200. However, their AGI of $337,000 exceeds the phase-out threshold for married couples filing jointly, which begins at $311,300. The phase-out reduces the exemption by 2% for each $2,500 (or part thereof) over the threshold. Their AGI exceeds the threshold by $25,700, resulting in a 20% reduction ($16,200 x 20% = $3,564). Therefore, their allowable exemption is $16,200 - $3,564 = $12,636.

Lila and Ted Are Married and Have AGI of $337,000