- Days left
An exemption is a deduction allowed for the taxpayer, a spouse, and dependents. Essentially, people who are supported by the income of the spouse and the taxpayer can become an exemption, if all the rules are followed.

Exemptions are most commonly taken for the taxpayer, the spouse, and any small children living in the home. But there are others who might also be an exemption, including children of divorce who don't live with you, an elderly sibling or parent supported by you, foster children, adopted children, and other relatives for whom you provide over half of the support.

The key to exemptions is that each person may only be claimed on one tax return. So, for example, if you've got small children living with your ex-wife, only one of you may claim the exemptions for those children.

Details on exemptions can be found in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Increase your money and finance knowledge from home

How to Buy a Car

How to get the best deal and buy a car with confidence.

View Course »

Building Credit from Scratch

Start building credit...now.

View Course »

TurboTax Articles

How to Write Off Sales Taxes

For the years 2005 through 2013, the Internal Revenue Service (IRS) permits you to write off either your state and local income tax or sales taxes when itemizing your deductions. People who live in a state that does not impose income taxes often benefit most from this deduction. However, you might also be better off deducting sales taxes instead of income taxes if you make large purchases during the year and your total sales tax payments exceed those for state income tax. You can use either the actual sales taxes you paid or the IRS optional sales tax tables.

Add a Comment

*0 / 3000 Character Maximum