For tax years prior to 2018, personal and dependent tax exemptions play an important role in determining your federal taxable income. Update: These 2017 tax brackets apply to 2017 tax returns filed in early 2018. The personal exemption for tax year 2017 remains at $4,050. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). All material in this publication may be reprinted freely. The exemption was useful because it reduced your taxable income, but there are a couple of instances where you were not eligible to claim the personal exemption. It phases out completely at $384,000 ($436,300 for married couples filing jointly.) For every $2,500 of AGI (or portion thereof) above the beginning phaseout amount shown in the table below for your filing status, the $4,050 exemption amount is reduced by 2%. U.S. Unlike with deductions, the amount of exemptions you can claim does not depend on your expenses. The personal exemption for Tax Year 2017 begins to phase out with adjusted gross incomes of $261,500 for single taxpayers ($313,800 for married couples filing jointly). So 49% of my gross income increase went to paying federal taxes. Your person exemption reduces your taxable income by $4,050 for 2017. Tax exemptions reach back to the Civil War era, when the U.S. government established a standard $600 personal tax exemption at the height of the war.. For single taxpayers, personal exemptions begin to be phased out at $261,500 and are fully phased out … Individual Income Tax: Personal Exemptions and Lowest and Highest Bracket Tax Rates, and Tax Base for Regular Tax, Tax Years 1913-2012 To give an example, a married couple with three qualifying dependent children (12, 17 and a 21-year-old college student) could use the personal exemption to automatically deduct $20,250 ($4,050 x 5) from their taxable income under the old tax law. You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. When filing your taxes for 2019, uses these tax brackets to figure out how much you owe. 2017 Personal Exemption Amounts. The 100,000th dollar is taxed more than your 1st dollar. You may also receive a tax credit of up to $1,000 for each dependent child under the age of 17. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan. The personal exemption amount was indexed for inflation—it increased slightly from year to year to keep pace with the economy, although if the economy remained relatively steady, the personal exemption amount also stayed the same. PE phase-out 2017 2018 The phase-out of personal exemptions begins when adjusted gross income (AGI) reaches: Single $261,500 MFJ $313,800 MFS $156,900 HOH $287,650   This happened in tax years 2016 and 2017 when it remained stuck at $4,050 for tax years 2016 and 2017. These are the federal income tax rates and standard deductions by tax filing status and income. But the way Congress eliminated it created confusing questions about what actually changed in some states. You are allowed a personal exemption for your taxes. You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. Beginning with the 2018 tax year, personal and dependent exemptions are no longer used on your federal tax return. And these taxes are assessed on your adjusted gross income. For 2017, this amount is $156,900 for a married individual filing a separate return; $261,500 for a single individual; $287,650 for a head of household; and $313,800 for married individuals filing jointly or a qualifying widow(er). If you can be claimed as a dependent on another person's tax return, you can't claim a personal exemption for yourself. It's also a marginal tax system. This means that you are taxed at a higher rate when you earn more. The personal exemption amount for 2017 is $4,050, the same as 2016.

However, the exemption is subject to a phase-out that begins with adjusted gross …

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