Exemptions

An exemption is an amount ($3,500 for 2008) that can be deducted for the taxpayer and spouse (if applicable) and each dependent claimed on the tax return. The exemptions are phased out for higher income taxpayers. See the term “Dependent.” The exemption deduction is disallowed for an individual who files a return and is also claimed, or could be claimed, as a dependent by another taxpayer.

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