5 Things About Exemptions in 2017
Most taxpayers can claim one personal exemption for themselves and, if married, one for spouse. This helps reduce their taxable income on their 2017 tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2017 tax return.
1. Claiming Personal Exemptions. On a joint return, taxpayers can claim one exemption for themselves and one for their spouse. If a married taxpayer files a separate return, they can only claim an exemption for their spouse if their spouse meets all of these requirements. The spouse:
• Had no gross income.
• Is not filing a tax return.
• Was not the dependent of another taxpayer.
2. Exemptions for Depen. A dependent is either a child or a relative who meets a set of tests. Taxpayers can normally claim an exemption for their dependents.
3. Depen Cannot Claim Exemption. If a taxpayer claims an exemption for their dependent, the dependent cannot claim a personal exemption on their own tax return. This is true even if the taxpayer does not claim the dependent's exemption on their tax return.
4. Dependents May Have to File a Tax Return. This depends on certain factors like total income, whether they are married, and if they owe certain taxes.
5. Exemption Phase-Out. Taxpayers earning above certain amounts will lose part or all the $4,050 exemption. Amounts differ based on the taxpayer's filing status.
Issue #: IRS Tax Tip 2018-20