There have been numerous changes in the tax rules recently. Many of them are mandated by indexing -- that is, annual upward adjustments to provide relief from inflation, as measured by increases in the Consumer Price Index. Other revisions are created or liberalized by the 2003 Tax Act that President Bush signed last May. What follows are the highlights of several changes that might affect you.

Personal Exemptions. You get a bigger break just for being you. Exemptions are worth $3,050 apiece for 2003, up slightly from $3,000 for 2002.

Reductions of Exemptions. For upper-incomers with AGIs (short for Adjusted Gross Income, the figure on the last line of page one of Form 1040) above certain levels, the deductions for all exemptions -- including those for a spouse and dependents -- gradually decline.

For 2003, the exemption phase-out begins when AGI exceeds $139,500 for singles, up from 2002's $137,300; $209,250 for joint filers, up from $206,000; $174,400 for heads of household, up from $171,650; and $104,625 for marrieds filing separately, up from $103,000.

Partial Disallowance of Itemized Deductions. Most itemized deductibles must be reduced by three percent of the amount by which your AGI surpasses a specified amount -- $139,500 for 2003, up from $137,300 for 2002. Put another way, you forfeit $30 in total 2003 deductions for every $1,000 of AGI above $139,500 if you are single or filing jointly. The $139,500 figure drops to $69,750 if you are married and file a separate return; going that route does not raise the threshold for a couple to a combined $279,000.

Standard Deductions. The standard deduction is the no-proof-required amount that is automatically available without having to itemize for outlays like charitable donations and real estate taxes. Just how much of a standard deduction you get depends on your filing status and age. The normal standard deductions are $9,500 for joint filers (substantially increased by the 2003 tax act to double the amount for singles); $4,750 for marrieds filing separately; $7,000 for heads of household; and $4,750 for singles.

Extra-Large Standard Deductions for the Elderly and Blind. For those individuals who are at least 65 by the close of the 2003 tax year, the standard deduction increases by $950 for a married person (whether filing jointly or separately) and $1,150 for an unmarried person. Persons who are considered blind are entitled to those additional amounts or double those amounts if they are both 65 and blind.

Caution: Special rules lessen the deduction amounts allowed individuals (children, mostly, or elderly parents) who can be claimed as dependents on the returns of other people. The standard deduction can be as little as $750.

Published: October 24, 2003

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Julian Block is an attorney and author based in Larchmont, N.Y. He has been cited as “a leading tax professional” (New York Times), "an accomplished writer on taxes" (Wall Street Journal) and "an authority on tax planning" (Financial Planning Magazine).More of his articles are at julianblocktaxexpert.com. His books include “Julian Block’s Home Seller’s Guide to Tax Saving.” Law professor James Edward Maule of Villanova University praised it as “an easy-to-read and well organized explanation of the tax rules. Home sellers would be well advised to buy this book.” It is available from PassKey Publications, as well as at outlets such as Amazon and Barnes & Noble.