Facts About Tax Exemptions You May Not Know

Tax Deductions and Credits man relaxing on a sofa

Who can you claim on your tax return? You know you can’t claim an exemption for the family cat, but what about your brother-in-law who camps out in your living room because he lost his job?  And how about your boomerang children who are back again in their bedrooms after graduating college?

It’s important to know who qualifies for a dependency exemption, because for each exemption you can claim a $3,900 deduction on your 2013 tax return ($3,950 for 2014). Here are some rules that will help you figure out who qualifies and who doesn’t.

1. You count as an exemption.  Unless someone else provides most of your support, you can claim an exemption for yourself.

2. So does your spouse. If you are married and file a joint return, you can claim an exemption for your spouse. But if you and your spouse file separately, you’ll claim yourself on your tax return and your spouse will claim themselves on theirs. If you file a separate tax return and your spouse had no gross income, isn’t filing a return, and was not the dependent of another taxpayer, then, and only then, can you claim an exemption for your spouse as a dependent.

3. Your dependent children count as well.  You can claim an exemption for each of your children, as long as they are under age 19 or were full-time students during five months of the year and are under the age of 24, or are totally and permanently disabled. And of course you must provide more than half that child’s support.

4. Married children may not count. You can’t claim an exemption for a child who is married and files a joint tax return with his or her spouse, unless that tax return was simply to claim a refund.

5. Parents can be dependents too.  If you provide more than half of your parents’ support and their income is under $3,900 each, then you can claim them as dependents on your tax return, even if they don’t live with you.

6. So what about your unemployed brother-in-law? You can claim an exemption for a relative whose income for the year was less than $3,900 ($3,950 in 2014) and for whom you furnished over half of their support.  If the person was a friend rather than a relative, they must have lived in your home for the entire year.

 7. But if your income is very high …..  If your income is over $250,000 ($300,000 on a joint return) the $3,900 per exemption will begin to phase out, and you will lose 2% of the exemption amount for each $2,500 of income you have above that threshold.  But don’t worry about making that calculation – it will be made automatically for you by TurboTax.


Comments (3) Leave your comment

  1. Why when I did my taxes at the same place where i been filing for 8 years they told me my two 17 years old that are in the eleventh grade I can’t get child tax credit for because they’re 17 and don’t qualified for the credit.please explain why

  2. My mother lives with me now and the only income she receives is Social Security and nothing else. Can I still claim her as a dependant ?

  3. ? I misfiled my property tax form. I redid my property tax form and in the double check I am to receive an $800 refund on property tax rather than a $400 refund which was wrongly submitted by mistake. (Was in wrong pile to submit) How do I amend my property tax form and refund? (state of mn.)

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