|  Generally,
you are allowed one exemption for yourself, and if you are married, one exemption
for your spouse. These are called personal exemptions, which reduce your taxable
income. There are several exceptions to this general statement.
Single Persons
If another taxpayer is entitled to claim you as a dependent, you cannot take an
exemption for yourself. This is true even if the other taxpayer does not actually
claim your exemption. Married
Persons
Your spouse is never considered
your dependent. You may be able to take one exemption for your spouse only because
you are married. Joint
Returns
On a joint return, you can
claim one exemption for yourself and one for your spouse.
Separate Returns
If you are married and file a separate return, you may claim an exemption for
your spouse if your spouse had no gross income for the calendar year and your
spouse is not the dependent of another taxpayer. This is true even if the other
taxpayer does not actually claim your exemption. This is also true if your spouse
is a nonresident alien. Death
of Spouse
If your spouse died during
the year, you can generally claim your spouses exemption if you could otherwise.
If you remarried during the year, you cannot take an exemption for your deceased
spouse. Divorced
or Separated Spouse
If you obtained a final decree of divorce or separate
maintenance by the end of the year, you cannot take your former spouse's exemption.
This applies even if you provided all of your former spouse's support. You
are allowed one exemption for each person you can claim as a dependent. You can
claim an exemption for a person if all five of the exemption tests are
met. You can take an exemption for your dependent even if your dependent files
a return. But that dependent cannot claim his or her own personal exemption if
you are entitled to do so. The
following five tests must be met for you to claim an exemption for a dependent:
Member
of Household or Relationship Test
A person must live with you for the entire year as a member of your household,
or be related to you in one of the ways listed under Relatives not living with
you (IRS Publication 17). Examples
include your child, stepchild, brother, parents, etc.
Citizenship Test
A person must be a
U.S. citizen or resident, or a resident of Canada or Mexico, for some part of
the calendar year.
Joint Return Test
Even if the other exemption tests are met, you are generally not allowed an exemption
for a dependent if he or she filed a joint return with another person. This test
does not apply if a joint return was filed by the dependent and his or her spouse
merely as a claim for a refund and no tax liability would exist for either spouse
on separate returns.
Gross
Income Test
Generally, you cannot take an exemption for a dependent if
that person had gross income of $3,650 or more for the year 2010. This test does
not apply if that person is your child and is either under age 19, or a student
under age 24.
Support
Test
You must provide more than half
of a person's total support during the calendar year to meet the support test.
You can figure whether you have provided more than half by comparing the amount
you contributed to the person's support with the entire amount of support received
from all sources. This includes support the person provided from his or her own
funds.
The
amount you can claim for your personal exemption for 2010 is $3,650. Refer to the Form 1040A or 1040 instructions for further details.
For more details on personal exemptions and dependents, please refer to IRS Publication
17 or their Web site at www.irs.gov. For more information contact The Henssler Financial Group Tax & Accounting Division at (770) 428-4025. |
