Personal Exemption


DEFINITION of 'Personal Exemption'

The dollar amount that each individual taxpayer is able to deduct for him or herself or a dependent each year. A separate personal exemption is accorded to every man, woman and child in the U.S. that must file a return. For example the amount of the personal exemption was $3,700 in 2011 and $3,800 in 2012.

BREAKING DOWN 'Personal Exemption'

The amount of each personal exemption that may be claimed was formerly subject to an adjusted gross income phaseout. However, this phaseout was eliminated for tax years 2010, 2011 and 2012. Future legislation will determine whether or not it will be reinstated in 2013.

  1. Taxes

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  3. Social Security Administration ...

    A U.S. government agency created in 1935 by President Franklin ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Federal Tax Brackets

    Income tax groupings specified by the Internal Revenue Service ...
  6. Exemption

    A deduction allowed by law to reduce the amount of income that ...
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  1. Do tax brackets include Social Security?

    A portion of your Social Security benefits may be subject to federal taxation using tax brackets. Your tax bracket is determined ... Read Full Answer >>
  2. Are tax brackets adjusted for inflation?

    Each year, the U.S. Internal Revenue Service (IRS) adjusts tax brackets for changes in the cost of living to calculate federal ... Read Full Answer >>
  3. Which is better for tax deductions, itemization or a standard deduction?

    Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive ... Read Full Answer >>
  4. Does everyone have to file a federal tax return?

    This may come as a surprise to many individuals, but not everyone needs to file a federal tax return. According to the IRS, ... Read Full Answer >>
  5. Does the IRS charge interest on penalties?

    The Internal Revenue Service (IRS) charges interest on any overdue taxes owed, but it does not charge interest on penalties. ... Read Full Answer >>
  6. Can the IRS take your house?

    The Internal Revenue Service (IRS) is an agency in the United States that enforces the collection of personal and corporate ... Read Full Answer >>

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