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. who must file a return. The amount of the personal exemption was $4,050 in 2017. The new tax bill eliminates the personal exemption from 2018 through 2025.

BREAKING DOWN 'Personal Exemption'

The amount of each personal exemption that may be claimed has been subject to an adjusted gross income phaseout. This phaseout was eliminated for tax years 2010, 2011 and 2012 and reinstated in 2013. For 2017, the phaseout ranges (phaseout begins/phaseout ends) are: Individuals ($261,500/$384,000); Married Filing Jointly ($313,800/$436,300); Head of Household ($287,650/$410,150);  Married Filing Separately ($156,900/$218,150).

Starting in 2018 until it expires at the end of 2025, there will be no personal exemption, under the new tax legislation. However, the standard deduction is roughly doubled for the same period.

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