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What are Personal Exemptions?

When calculating Federal Income Tax, Personal Exemption is an amount which is deducted from an employees Gross Pay dependant on their circumstances. Personal Exemption amounts are deductable for:

  • The individual filing the tax return
  • The spouse of the individual filing the tax return
  • A dependant of the individual filing the tax return

How are Personal Exemptions Calculated?

Personal Exemptions are calculated by adding all Personal Exemptions and deducting them from your Gross Pay, this provides you with your Taxable Income.

What is Personal Exemption for?

Personal exemption is designed to ensure individuals and family groups with a level of income which pays for a basic level of life (food, drink, shelter, heating, power etc).

Though most taxpayers would struggle to exist purely on the figure stated we must remember this is a basic figure and does not include luxuries.

That being said, a basic level of life is more survival than living and does not fully account for inflation fluctuations in food, homes etc.

There are further deductions which can be claimed in addition to Personal Exemptions to allow further reduction in the amount of income tax paid.

You can view the Personal Exemptions that you are entitled to based on your Gross Pay by using the Tax Calculator, simply enter your Gross Pay and select your filing status, number of dependant and number of children that you are claiming Child Tax for.

You can calculate how Personal Exemptions affect your tax payments here, simply select the advanced tax calculator and enter your Personal Exemptions details

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