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How to Calculate Exemptions

1.

Complete the top section of Form 1040 for yourself and your spouse. Check the box next to line 6a and 6b, if applicable. Complete line 6c for all dependents. Indicate the total number of exemptions claimed in the box for line 6d.

2.

Review the amount of your adjusted gross income. If your AGI is greater than the thresholds set by the IRS based on filing status, your exemption deduction will be reduced. For 2009, the phase-out was triggered if your AGI was greater than $125,100 for married filing separate taxpayers, $166,800 for single filers, $208,500 for head of household filers, $250,200 for married people filing jointly, and qualifying widower filers. If your AGI is greater than the threshold for your filing status, reduce the exemption deduction by 2 percent for every $2,500, or $1,250 if married filing separately.

3.

Calculate the exemption deduction you are claiming by multiplying the number indicated on line 6d by $3,650 and enter the result on line 42 of Form 1040. If you are able to be claimed as a dependent by another taxpayer, do not reduce your taxable income for your exemption. For example, a parent may be entitled to take an exemption deduction for a child who is a college student. If the student worked during the year and files his own tax return, the student will not be able to claim the exemption for himself.

4.

Subtract the deduction for exemptions entered on line 42 from line 41 to arrive at taxable income.

Tips and Warnings

  • This article has been written using information for the calendar year 2009. The amount allowed for exemptions increases each year. Check the IRS website for past and current information.


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