Federal Income Tax Exemptions and Deductions

Did you know that you don't pay taxes on the first dollars you earn? This tax-free income is called income tax exemptions and deductions.

So how much money is exempt from income taxes?

Each income tax exemption is worth $3950- for 2014 ($3900- for 2013). How many exemptions you can claim, depends on your filing status and how many dependents you claim on your tax return.

    Note:These exemptions are only for income tax. Social Security and Medicare tax (also known as payroll taxes or self employment taxes) you start paying from the first dollar you earn.

    States also have tax exemptions and deductions but the amounts are often different than those from the IRS.

Personal Exemptions

You get one federal income tax exemption for yourself. Another one for your spouse if you're married and filing jointly.

You can also get an exemption for your spouse if you're married and filing separately and your spouse has no income and is not filing a tax return.

The above is true even if your spouse died during the year unless you remarried during the year.

You cannot claim an exemption for yourself if you can be claimed as a dependent. The same is true for your spouse.

    Here's a unique situation:

    If your spouse dies and you remarry during that same year and you have no gross income, both your deceased spouse and your new spouse can take an income tax exemption for you if they each file a separate return. If you file a joint return with your new spouse, only this return can claim the exemption.

An exemption for your spouse is not allowed if you get a final decree of divorce or separate maintenance by the end of the year.


For each person you claim as a dependent you get an additional income tax exemption. But if a different taxpayer can claim you as a dependent, you cannot claim any dependents yourself.

Whom can you claim as a dependent?

A qualifying child or a qualifying relative who:

  • is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.
  • is not filing a married filing joint return. Unless it is just for a refund and they would have no tax liability if they would've filed separately.
  • is not claimed as a dependent by anyone else
Who can be your qualified child? [read more]

Who can be your qualifying relative?
[read more]

Other Income Tax Exemptions and Deductions

You can also get income tax exemptions if you or spouse are over 65 or legally blind (or both).

You also get to deduct a standard deduction based on your filing status. You can also choose to itemize that deduction instead.

Read on to find out more:

Updated January 27, 2015

Go to Federal Tax Deductions

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