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What to know about exemptions and dependents before filing

Posted on March 8, 2018

Feeling a little unsure about filing personal taxes this year?

You’re not alone. Many taxpayers have questions. The good news is, at Teipen Selanders Poynter & Ayres, we are on top of the flutter of last minute changes and new regulations effecting taxes for 2018, as well as those regulations effecting last year, for which we are preparing tax returns now through April 17th.

In general:

  • Most taxpayers can claim one personal exemption for themselves and, if married, one for your spouse. This helps reduce your taxable income on your 2017 tax return.
  • You may also be able to claim an exemption for each of your dependents. Each exemption normally allows a deduction of $4,050 on your 2017 tax return.

However — while each deduction is worth the same amount, different rules apply depending on your specific situation.

Here’s what our CPAs will ask you prior to filing your 2017 return:

  • What personal exemptions are you claiming?  On a joint return, taxpayers can claim one exemption for themselves and one for their spouse, even if your spouse did not have any income.
  • Are you claiming any dependents?  A dependent is either a child or a relative. Your CPA can provide guidance on this if you are not sure if your dependent qualifies. Taxpayers must list a Social Security number for each dependent on their tax return.
  • Can a dependent claim an exemption? No, if a taxpayer claims an exemption for their dependent, the dependent cannot also claim a personal exemption on their own tax return.
  • Can dependents file a tax return, too? It depends on factors like their total income, whether they are married, and if they owe certain taxes. It can be complicated, so ask your CPA for advice on your particular situation.
  • What about Exemption Phase-Out? Taxpayers earning above certain amounts will lose part or all the $4,050 exemption. These amounts differ based on your specific filing status. Again, ask your CPA to review your details to get an accurate answer.

While there’s been a lot of fussing about tax preparation and filing this year, having a certified CPA can make a world of difference to your bottom line. At TSPA, we will make sure you get all the 2017 tax breaks you qualify for, and help make sure that your 2018 paperwork is in order for tax prep next year.