1040x for new 1099-div (for $63 and $9 in foreign tax)- why does my exemption amount change from 12,150 to 11,907 - i would think it would just impact tax owed.

[aykornb]

i got a 1099-div late - and entered it for 1040x - but it seems to change my exemption amounts - why would those change?

[DawnC0 · Accepted solution]

Exemption amounts are phased-out as income increases.  You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown for your filing status. If your AGI exceeds the amount shown (in the chart below) by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero.

https://www.irs.gov/publications/p501#en_US_2017_publink1000195627

Filing Status - AGI Level That Reduces Exemption Amount

• Married filing separately - 156,900
• Single - 261,500
• Head of household - 287,650
• Married filing jointly - 313,800
• Qualifying widow(er) - 313,800

**This answer is for 2017 tax returns.  The TCJA eliminated personal and dependent exemptions effective with 2018 tax returns.   The link now references Publication 501 for the current year, so exemption information and charts are no longer included.   **Note added on 03/25/20.

[aykornb]

this was spot on - it pushed me just into this area - but the calculation for an additional 54 of div income - pushed my tax only $7 - did it take into account the change in exemptions also? It doesn't look like it. I would think with the additional 240 some odd dollars in income (due to the loss of exemption) it would be more - or is it correct?

[DawnC0]

It is correct.  There are many different factors that generated the additional $7 due.  Look at both pages of the 1040X (it reflects all of the NET changes and shows the detail of how the additional tax was calculated).  Other deduction and credit amounts probably changed as well.  Some credits reduce your tax bill dollar for dollar while the exemption changes and additional income increase your tax bill by a percentage.  You can rest assured the calculations are correct. 

What is the TurboTax 100% Accurate Calculation Guarantee?

 😉

[aykornb]

thanks - been using turbo tax for almost 30 years now - never questioned the calcs yet  🙂