Taxes

Q&A: What are personal exemptions?

Personal exemptions are reductions in taxable income that are given based on how many people are being claimed on a tax return. Personal exemptions were suspended until 2025 as a result of the Tax Cuts and Jobs Act (TCJA).

Real-life application: In 2017, personal exemptions were worth $4,050 per person. Here are some examples of various possible households with an income of $50,000, various filing statuses, and various personal exemptions:

Household 1 (1 person)
Filing status: Single
Kids/dependents: 0
Personal Exemption(s): 1 ($4,050)
Standard Deduction: $6,350
Taxable income: $39,600 ($50,000 – $4,050 – $6,350)

Household 2 (1 parent and 1 child)
Filing status: Head of Household (HOH)
Kids/dependents: 1
Personal Exemption(s): 2 ($8,100)
Standard Deduction: $9,350
Taxable income: $32,550 ($50,000 – $8,100 – $9,350)

Household 3 (2 parents and 2 children)
Filing status: Married Filing Jointly (MFJ)
Kids/dependents: 2
Personal Exemption(s): 4 ($16,200)
Standard Deduction: $12,700
Taxable income: $21,100 ($50,000 – $16,200 – $12,700)

Leave A Comment