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Income Tax Exemptions

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Qualifying For Personal Income Tax Exemptions
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Qualifications And Conditions For Personal Income Tax Exemptions

Tax ExemptionsIn United State’s tax system, individuals, businesses, estates and other taxable items can be qualified for tax exemptions depending on various conditions. Tax exemption is one of the major components of tax payments since these amounts can greatly reduce taxes especially for individual taxpayers. Through tax exemptions, certain items or tax liabilities will be removed from your taxes like your tax deductibles. Exemptions on various taxes may be granted at the federal level or it can also be approved from state taxation level.

Common Exemptions

One of the most common exemptions is the personal income tax exemptions. The Internal Revenue Service requires every individual taxpayer to declare their personal exemptions when reporting their income and when filing their tax returns. When filing tax return or income, make sure to have the correct and complete records of income tax exemptions since these items can reduce your total taxable income. The total amount of tax exemption you can obtain will depend on your AGI or Adjusted Gross Income and filing status.

The Internal Revenue Service sets a specific amount for AGI and if a certain taxpayer’s AGI is equal or less than the threshold amount set by the IRS, the taxpayer will be qualified for personal tax exemptions. Here are the standard rules you should remember when claiming personal exemptions for you, your spouse and your dependents:

  • tax imageEvery individual taxpayer can claim one exemption for their own self if they are not claimed as a dependent from other taxpayer’s tax returns.
  • For married taxpayers who are filing a joint income tax return, they can also claim one exemption for their spouse even if the spouse is not listed as their dependent.
  • For married taxpayers who are filing income tax returns separately, or filing as head of household, they can only claim one exemption for their spouse if their spouse has no adjusted gross income. They can also claim one exemption for their spouse if their spouse is not filing for his or her own tax return, and is not claimed as a dependent from other taxpayer’s tax returns.

You can also claim tax exemptions for your children listed as your qualified dependents. To be a qualified child, the child must be your biological and legal child. Legally adopted children are also considered your qualified dependent. Your children must also be under 19 years old at the end of the tax period. For full-time students, the age limit is 24. Disabled children are automatically qualified for income tax exemptions, no matter what their age is under the Child Tax Credit and The Child and Dependent Care Credit.

To claim tax exemptions for your dependents, relatives and spouse, you should also provide the SSN or the Social Security number of each dependent. Dependents who are not qualified to have an SSN should obtain their ITIN or Individual Taxpayer Identification Number. You should also provide their date of births especially if you are preparing your tax return through tax preparation software. Families with five members can actually qualify for up to $18,250 personal tax exemptions plus the deductions and tax credits.