This year, your deductions for personal exemptions — and for itemized deductions — will begin to phase out if your adjusted gross income exceeds certain thresholds: $309,900 for couples filing jointly or qualifying widow/widower; $284,050 for heads of household; $258,250 for singles; and $154,950 for those married but filing separately. For every $2,500 of AGI over that threshold (for couples) or $1,250 (if filing separately)—or fraction thereof—you lose 2 percent of the deduction.

Not all deductions are treated equally. Deductions for mortgage interest, real estate taxes, state or local taxes (or general sales taxes), charitable contributions and miscellaneous expenses are subject to phaseout, but medical and dental expenses, investment interest, casualty and theft losses and gambling losses are not.

Another proviso: in no case can that phaseout exceed 80 percent of the affected deductions. Most households are not affected by these phaseouts. For those who are, moving income or expenses to another year may help. 

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University. He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

nickersonpa.com