Most taxpayers can claim an exemption for themselves and reduce their taxable income on their tax return. They may also be able to claim an exemption for each of their dependents. Each exemption normally allows them to deduct $4,050 on their 2016 tax return.
Key Points on Dependents and Exemptions
1. Personal Exemptions
Taxpayers can usually claim exemptions for themselves and their spouses on a jointly filed tax return.
For married taxpayers filing separate returns, an exemption can only be claimed for a spouse if that spouse:
- Had no gross income
- Is not filing a tax return
- Was not the dependent of another taxpayer
2. Exemptions for Dependents
A dependent is either a child or a relative who meets a set of tests. Taxpayers can normally claim dependents as exemptions.
- List a Social Security number for each dependent.
- For more on these rules, see IRS Publication 501, Exemptions, Standard Deduction and Filing Information.
3. No Exemption on Dependent’s Return
If a taxpayer can claim a person as a dependent, then that dependent cannot claim a personal exemption on his or her own tax return. This is true even if no one claims that person on a tax return.
4. Dependents May Have to File
A dependent may have to file a tax return. This depends on certain factors like:
- Total income
- Whether they are married
- If they owe certain taxes
5. Exemption Phase-Out
Taxpayers earning above a certain amount will lose part or all of the $4,050 exemption. See Publication 501 for details.
6. E-file Your Tax Return
The IRS urges taxpayers to kick the paper habit. IRS E-file options include:
- Free Volunteer Assistance
- IRS Free File
- Commercial software
- Professional assistance
7. Try the IRS Online Tool
Get questions answered by using the Interactive Tax Assistant tool on IRS.gov.
Frequently Asked Questions
What is a personal exemption on a tax return?
A personal exemption allows a taxpayer to reduce their taxable income by a set amount. In 2016, the exemption was $4,050 per eligible individual, which could be claimed for the taxpayer and potentially their spouse.
Can I claim my spouse as an exemption on a separate tax return?
Yes, but only under specific conditions: your spouse must have had no gross income, not filed a tax return, and not been claimed as a dependent by another taxpayer.
Who qualifies as a dependent for exemption purposes?
Dependents can be children or relatives who meet IRS criteria. Each dependent must have a valid Social Security number, and their eligibility is subject to specific relationship, residency, and support tests.
Can a dependent claim a personal exemption on their own tax return?
No. If someone else can claim a person as a dependent, that person cannot claim their own personal exemption, regardless of whether they are actually claimed.
When does a dependent need to file a tax return?
A dependent may be required to file a return based on factors such as their total income, marital status, and any special taxes owed. The need to file does not always depend on whether they are being claimed.