In addition to taking either the standard deduction or itemizing your deductions, you can reduce your taxable income by claiming personal exemptions. Each exemption is worth a specific dollar amount, adjusted annually for inflation.
Your exemption amount is claimed on Form 1040 or 1040A in the same area where you take your itemized or standard deduction. But your exemptions actually show up very early in the filing process. (In fact, you first encountered the concept of exemptions when you filled out your W-4, where you and your family members were taken into account as allowances to help you arrive at your correct withholding amount.)
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Our tax expert Kay Bell provides resourceful tips and advice to help you stay prepared for filing.