Taking Personal Exemptions
In addition to taking either a standard deduction or itemizing your deductions, the IRS allows you to take a personal exemption.
You may claim an exemption for yourself and for each dependent. Generally, you may claim at least one exemption for each person in your household.
Similar to itemized deductions, your personal exemption begins to phase out at higher incomes. This phase-out rule for losing your itemized deductions is also sometimes referred to as the "phase out" rule.
The phase-out limits will not apply for the year 2010, 2011 or 2012. The limitations on personal exemptions will re-surface in 2013 unless further legislation is passed to address this issue.
To calculate a partial phase-out for a personal exemption, see IRS Pub. 501.
