What are the phaseouts of itemized deductions and personal exemptions?

High-income taxpayers lose some of their itemized deductions and personal exemptions when their incomes exceed specified thresholds. The 2001 tax act eliminated both reductions for 2010 but both will reappear in full if the 2001 tax act sunsets in 2011 as scheduled. Prior to the 2010 repeal, the act limited the reductions to 2/3 in 2006 and 2007 and to 1/3 in 2008 and 2009.

History: In order to raise revenue, the Omnibus Budget Reconciliation Act of 1990 increased taxes on high-income taxpayers by phaseing out personal exemptions (termed "PEP") and limiting itemized deductions ("Pease").  The Omnibus Budget Reconciliation Act of 1993 made both provisions permanent.  The Economic Growth and Tax Relief Reconcilication Act of 2001 (EGTRRA) reduced out both provisions by one-third in 2006 and 2007 and two-thirds in 2008 and 2009 with complete repeal in 2010.  The scheduled sunset of EGTRRA will resurrect both PEP and Pease in 2011.