5 Money-Saving Tips About Exemptions and Dependents on Your Tax Return

The majority of taxpayers are able to claim an exemption for themselves, decreasing the taxable income on their tax return. You may also be able to claim an exemption for each of your dependents. Each exemption usually allows you to deduct $4,050 on your 2016 tax return.

​Below are five important tips to remember when it comes to dependents and exemptions:

1. Personal Exemptions. You can frequently claim exemptions for yourself and your spouse on a jointly filed tax return. For married taxpayers filing separate returns, an exemption can only be claimed for your spouse if that spouse:
   • Had no gross income,
   • Is not filing a tax return, and
   • 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 conditions. You can usually claim dependents as exemptions. Be sure to list a Social Security number for each dependent.
3. No Exemption on Dependent’s Return. If you 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 and if they owe certain taxes.
5. Exemption Phase-Out. If you earn above a certain amount, you will lose part or all of the $4,050 exemption.