Personal Exemptions And Dependents For Federal Income Tax

For this article today, I will focus on personal exemptions and dependents as it concerns your federal income tax return.

The exemption amount has been increased this year to $3,4000 for personal exemptions and exemptions for dependents. There are different rules for both types of exemptions.

If your adjusted gross income (AGI) is above a certain amount, you lose part of the benefit concerning exemptions. These phaseouts start at $117, 300 for married people filing separately, $156,400 for single filers, $195,500 for head of household, and for married filing jointly or qualifying widow(er), the amount is $234,600. Each exemption cannot be reduced to lower than $1,133.

With personal exemptions, you take one for yourself and one for your spouse. You also take an exemption for each of your dependents, provided they are a qualifying child or qualifying relative, which I will explain further down. If you claim an exemption for a dependent, and that dependent files a federal income tax return, they cannot claim their own personal exemption. Also, if another taxpayer is entitled to claim you as a dependent, and even if they do not, you cannot claim the personal exemption on your own return.

One thing that I need to clear up, as I run into this problem a lot, your spouse is NEVER your dependent.

If you file a separate return, you can claim the exemption for your spouse
only if your spouse had no gross income, is not filing a return, and was not the dependent of
another taxpayer. This is true even if the other taxpayer does not actually claim your spouse as
a dependent. This is also true if your spouse is a nonresident alien.

To claim an exemption for a qualifying child or qualifying relative, there are 3 rules that must be met. These 3 rules are Dependent taxpayer test, Joint return test, and Citizen or resident test.


Tests To Be a Qualifying Child

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Cousins do not count.

2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student, or (c) any age if permanently and totally disabled.

3. The child must have lived with you for more than half ofthe year.

4. The child must not have provided more than half of his or her own support for the year.

5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.

Tests to be a qualifying relative

1.) The person cannot be your qualifying child or the qualifying child of any other taxpayer.

2.) The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you, or (b) must live with you all year as a member of your
household , and your relationship must not violate local law. For example, if you live in Florida as boyfriend/girlfriend, this actually violates Florida law, so that would not be allowed.

3.) The person’s gross income for the year must be less than$3,400.

4.) You must provide more than half of the person’s total support for the year.


You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer

You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns.

You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico, for some part of the year.

I hope this helps you when it comes time to file your 2007 Federal Tax Return.

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Tim Watson is a tax preparer during the tax season. Do you need to learn even more about taxes? Here is a great guide U.S. Master Tax Guide . Need a break? Take a look at my Christmas Page . You may use this as is provided the resource box stays intact.