You might get confused by some of the provisions of the U.S. income tax code. After all, it was 67,204 pages long and included1,638 different tax forms in 2009 according to a report on NPR.com. Even seemingly simple terms like "dependent" and "exemption" can be confusing, because even though they are similar, they are quite different. You can usually claim an exemption for yourself when you file your federal income tax return, unless someone else claims you as dependent.
An exemption allows you to reduce your taxable income by a fixed amount that is determined by Congress, and which might be adjusted from time to time. Each exemption you claim reduced your taxable income for the 2011 tax year by $3,700. There are two types of exemptions: personal exemptions and dependency exemptions. You can claim a personal exemption for yourself, and another personal exemption for your spouse if you file your taxes using the married filing jointly status. You can claim one exemption for each of your dependents. Your spouse is never your dependent, according to the IRS.
One to a Customer
Each person only gets one exemption. This is important, because if someone else claims you as a dependent, you cannot claim an exemption for yourself. The person who claims you as a dependent is entitled to use your exemption to reduce their taxable income. This is true even if you are required to file a federal income tax return.
The amount of your standard deduction has nothing to do with whether or not you can claim an exemption for yourself. You can typically claim the standard deduction for your filing status regardless of whether another person can claim you as a dependent, although the amount of your standard deduction might be reduced. If no one can claim you as a dependent, your standard deduction for the 2011 tax year was $5,800 if you were single or married filing separately, $11,600 if you were married filing jointly or a qualifying widow(er) and $8,500 if you filed as head of household.
Where you report your exemptions depends on which tax form you file. If you file Form 1040, you would figure your exemptions on Lines 6a through 6d. Multiply the total by $3,700 and enter that amount on Line 42. If you use Form 1040A, you would figure your exemptions on Lines 6a through 6d. Multiply the total by $3,700 and enter that amount on Line 26. If you file your taxes using Form 1040EZ the amount of your exemption is combined with your standard deduction on Line 5.
- Internal Revenue Service: Topic 551 - Standard Deduction
- Internal Revenue Service: Publication 501, Exemptions, Standard Deduction and Filing Information
- Internal Revenue Service: Six Important Facts about Dependents and Exemptions
- Internal Revenue Service: How Much Can I Deduct for Each Exemption I Claim?
- Tax Policy Center: Taxation and the Family: What is the personal exemption?
- NPR: A Simpler Tax Code
- Tax filing gone wrong: this accountant has had enough. image by Alexey Stiop from Fotolia.com