Personal and Dependency Exemptions (Fall 2011)

Personal and Dependency Exemptions (Fall 2011) - Income Tax...

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Income Tax Accounting (Fall 2011) Personal and Dependency Exemptions Personal Exemptions Taxpayer Spouse Each person is entitled to one personal exemption. When a joint return is filed by a married couple, two personal exemptions may be claimed. A taxpayer is denied a personal exemption if he or she is qualified as a dependent of another taxpayer. We will consider this situation in depth later in this chapter. Dependency Exemptions IRC §152 defines a dependent as either: 1. A qualifying child or 2. A qualifying relative Qualifying Child : 1. Relationship Test Natural child, step child, adopted child, certain foster children A sibling A descendent of either of the above 2. Residence Test The child must have the same principal place of abode (i.e. residence) as the taxpayer for more than one half of the year 3. Age test The child must also meet any of the conditions concerning age Under the age of 19 Under the age of 24 and is considered a full-time student is permanently and totally disabled 4. Joint Return Test The “child” must not file a joint return
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This document was uploaded on 11/03/2011 for the course ACCOUNTING 415 at Rutgers.

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Personal and Dependency Exemptions (Fall 2011) - Income Tax...

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