Monday, January 18, 2016

Personal Exemption Is Your Gift

Don’t say the IRS doesn’t give you anything. While you’re forced to pay taxes, the IRS offers a personal exemption just for doing so. That means you get a deduction of a set amount each year just because you pay taxes. In 2015, the personal exemption amount is $4,000, which is an increase of $50 over last year.

There are no specific requirements in order to claim a personal exemption. They are available to every taxpayer who files a return. If you’re married, both you and your spouse are eligible to claim a personal exemption as long as they file jointly, meaning their return will have two exemptions listed. Those who file separately from their spouse are only able to claim their spouse’s exemption if the spouse has zero income and is not a dependent of another taxpayer.

Dependents who are claimed on another’s tax return are not eligible for a personal exemption. This generally occurs when children have income and have to file a tax return of their own, but are claimed as a dependent on their parent’s return. In these situations, the child cannot claim a personal exemption on their own return.

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