The IRS allows for taxpayers to claim up to two personal exemptions; one for the taxpayer himself/herself and one potentially for a qualifying spouse.
The self exemption is only permitted if no other person has the ability to claim the taxpayer as a dependent on their own return (irrelevant whether that person actually does make the dependency claim).
Similar to the self exemption, the spousal exemption is only permitted if no other person has the ability to claim the spouse as a dependent. Furthermore, the taxpayer must have been married1 to the spouse as of December 31 of the tax year (cannot be divorced or legally separated) and the couple must have filed a joint return (or filed separately but the spouse must have had no income and must not be filing his/her own return). Generally, a taxpayer whose spouse died during the tax year can still take an exemption for that spouse if that taxpayer did not remarry by December 31.
In sum, a taxpayer may claim zero, one or two personal exemptions. For each permissible 2012 personal exemption, the taxpayer will receive a $3,800 deduction (see Form 1040, Line 42). Therefore, selecting an accurate number of personal exemptions is hugely important for calculating true tax liability.
1For federal tax purposes, a marriage means only a legal union between a man and woman.
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