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.

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  1. Does everyone have to file a federal tax return?

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  2. 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 >>
  3. Do financial advisors prepare tax returns for clients?

    Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their ... Read Full Answer >>
  4. What is the difference between comprehensive income and gross income?

    Comprehensive income and gross income are similar, but comprehensive income is a specific term used on a company's financial ... Read Full Answer >>
  5. What tax breaks are afforded to a qualifying widow?

    The tax breaks accorded to qualifying widows or widowers include being able to use a tax filing status that allows for a ... Read Full Answer >>
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