2013 Personal Tax Exemptions

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2013 Personal Tax Exemptions

Personal tax exemptions are designed for tax payers who support themselves or any qualified dependents.  A personal tax exemption is essentially a tax deduction that reduces the income on which you are taxed each year.

 

Your exemption can reduce the amount of taxes taken from your check each month and how much you pay or receive back as a tax refund at the end of each tax year.

 

Personal tax exemption amounts are adjusted each year to account for inflation.  For example in 2013 it raised from $3,800 to $3,900.  The amount personal tax exemptions increase varies from year to year, and sometimes does not increase at all.  The chart below allows you to see the changes for the last decade.

 

2013: $3,900
2012: $3,800
2011: $3,700
2010: $3,650
2009: $3,650
2008: $3,500
2007: $3,400
2006: $3,300
2005: $3,200
2004: $3,100
2003: $3,050

 

To determine how many dependents you can claim you have to determine who qualifies:

 

  • You can claim yourself only if no one else can claim you as a dependent.
  • You cannot claim anyone who files a tax return with a spouse.

  1. If you are filing a joint return you can claim two exemptions, one for you and one for your spouse.  The exception is if you were not married the entirety of the tax year and one or both of you can be claimed as a dependent of someone else. 

 

For example, two college sophomores get married in November of 2013 and prior to being married each of their parents financially supported them.  In this case their parents can claim them as dependents in tax year 2013 and in 2014 they can file a joint return.

 

Some personal exemptions are reduced in correspondence with a personal exemption phaseout, also called a PEP.  For the last three tax years the PEP was eliminated, but returns again in tax year 2013.  The PEP phaseout is as follows:


Joint Filing                                        $300,000-$422,500

Widower                                            $300,000-$422,500

Head of Household                          $275,000-$397,000

Single                                                $250,000-$372,000

Married & Filing Individually          $150,000-$211,250

 

To determine your which tax deductions and phaseouts you qualify for visit TurboTax online and take their tax calculating software for a test run.