Tax Exemptions

In 2004, you can deduct $3,100 for each exemption claimed. You can claim yourself, your spouse (if filing jointly), and any dependents you may have.

To claim someone as dependent, each dependent must meet five dependency tests:

1. Support - you must have furnished over half of their total support for the calendar year
2. Income - they must have less than $3,100 of gross income unless they are under age 19 or a full time student under age 24
3. They must live with you for the entire year or be related to you
4. They cannot file a joint return with a spouse
5. They must be a citizen, national or resident of the U.S., Canada, or Mexico

Phase-Out

When your adjusted gross income exceeds certain threshold amounts (see below), a phase-out applies to your exemptions. You must reduce your exemptions by 2% for each $2,500 or part thereof, of the excess. For each $1,250 or part thereof if married filing separately.

• $142,700 - Single
• $214,050 - Married filing jointly, Qualifying Widow(er)
• $107,025 - Married filing separately
• $178,350 - Head of household

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