Most people can claim an exemption on their tax return. It can lower
your taxable income. In most cases, that reduces the amount of tax you owe for
the year. Here are the top some tax facts about exemptions to help you file
your tax return.
1. Exemptions Cut Income. There
are two types of exemptions. The first type is a personal exemption. The second
type is an exemption for a dependent. You can usually deduct $4,000 for each
exemption you claim on your 2015 tax return.
2. Personal Exemptions. You can
usually claim an exemption for yourself. If you’re married and file a joint
return, you can claim one for your spouse, too. If you file a separate return,
you can claim an exemption for your spouse only if your spouse:
·
Had no gross income,
·
Is not filing a tax return, and
·
Was not the dependent of another taxpayer.
3. Exemptions for Dependents. You
can usually claim an exemption for each of your dependents. A dependent is
either your child or a relative who meets a set of tests. You can’t claim your
spouse as a dependent. You must list the Social Security number of each
dependent you claim on your tax return. For more on these rules, see IRS
Publication 501, Exemptions, Standard Deduction, and Filing Information. Get
Publication 501 on IRS.gov. Just click on the Forms & Pubs tab on the home
page.
4. Report Health Care Coverage. The health care law requires you to
report certain health insurance information for you and your family. The
individual shared responsibility provision requires you and each member of your
family to either:
·
Have qualifying health insurance, called
minimum essential coverage, or
·
Have an exemption from this coverage
requirement, or
·
Make a shared responsibility payment when you
file your 2015 tax return.
·
Visit IRS.gov/ACA for more on these rules.
5. Some People Don’t Qualify. You normally may not claim married persons
as dependents if they file a joint return with their spouse. There are some
exceptions to this rule.
6. Dependents May Have to File. A
person who you can claim as your dependent may have to file their own tax
return. This depends on certain factors, like total income, whether they are
married and if they owe certain taxes.
7. No Exemption on Dependent’s Return.
If you can claim a person as a dependent, that person can’t claim a personal
exemption on his or her own tax return. This is true even if you don’t actually
claim that person on your tax return. This rule applies because you can claim
that person as your dependent.
8. Exemption Phase-Out. The
$4,000 per exemption is subject to income limits. This rule may reduce or
eliminate the amount you can claim based on the amount of your income. See
Publication 501 for details.
Each and every taxpayer has a set of fundamental rights they should be
aware of when dealing with the IRS. These are your Taxpayer Bill of Rights.
Explore your rights and our obligations to protect them on IRS.gov.
If you would like any additional information please feel free to contact
me.
Amare
Berhie, Senior Tax Accountant
(651)
300-4777, (612)424-1540, (651) 621-5777
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