Personal exemptions for tax year 2011

To continue with our tax lessons from the previous blogs, in this blog, we are going to learn about personal exemptions. For tax year 2011, this amount is $3,700.

Here’s a run through of who you can claim as dependents for personal exemptions. Naturally, you get 1 personal exemption for yourself. You are not allowed a personal exemption for your dependents if they are also claimed as dependents on another’s tax return. Basically, if they use it, you lose it.

If you are married and file jointly, each married taxpayer claims $3,700.
If a person is born or dies during the year, he/she is entitled to a personal exemption for the entire year. Exemptions are not prorated.

A taxpayer is entitled to an exemption for each qualifying child and qualifying relative. Each category has its own sets of requirements.

A qualifying child must past these tests:
1. Close relative – a son, daughter, stepson, stepdaugther, foster child
2. Age limit – the mentioned perons above need to be under age 19 (or 24 if a full-time student)
3. Residency requirement – must live with the taxpayer for more than half a year
4. Support test – the qualifying child did not contribute more than half of his/her own support. This is a recent change.

Qualifying Relative
1. The taxpayer must support more than half of the support
2. The taxable gross income of the relative is under $3,700

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