What is the Pease limitation?

What is the Pease limitation?

The Pease limitation would reduce the value of certain itemized deductions by 3% for every dollar of a taxpayer’s taxable income above $400,000, with a maximum reduction equal to 80% of the total value of the taxpayer’s itemized deductions.

What is the 2% limitation?

The 2% rule referred to the limitation on certain miscellaneous itemized deductions, which included things like unreimbursed job expenses, tax prep, investment, advisory fees, and safe deposit box rentals.

What are Pease deductions?

The Pease limitation, named after the late U.S. Rep. Donald J. Pease from Ohio, capped the value of itemized deductions for taxpayers. Depending on a taxpayer’s filing status, the caps apply to those with annual adjusted gross income (AGI) of more than $156,900 to more than $313,800.

What is the Pease amendment?

This provision, named after the late Congressman Donald Pease, reduces the value of itemized deductions for high income taxpayers. It works by reducing the value of a taxpayer’s itemized deductions by 3 percent for every dollar of taxable income above a certain threshold ($254,200 single; $305,050 married).

What is the filing threshold for 2016?

What Are the Minimum Income Requirements to File a 2016 Federal Income Tax Return?

Filing Status Age Minimum W-2 Income Requirement
Single Under 65 $10,350
65 or older $11,900
Head of Household Under 65 $13,350
65 or older $14,900

What is MISC 2% itemized?

Miscellaneous itemized deductions are those deductions that would have been subject to the 2%-of-adjusted-gross-income (AGI) limitation. You can still claim certain expenses as itemized deductions on Schedule A (Form 1040), Schedule A (1040-NR), or as an adjustment to income on Form 1040 or 1040-SR.

What is subject to NIIT?

The NIIT applies to income from a trade or business that is (1) a passive activity, as determined under § 469, of the taxpayer; or (2) trading in financial instruments or commodities, as determined under § 475(e)(2).

What is the NIIT tax rate?

What is the Net Investment Income Tax (NIIT)? The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

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