| There are two types of exemptions: personal exemptions and dependency exemptions. Each exemption reduces the income that is subject to tax by the exemption amount. For 2004, the exemption amount was $3,100. Only one exemption can be claimed per person. An exemption for a particular person cannot be claimed on more than one tax return. Personal exemptions can be claimed for the taxpayer and spouse. Each personal exemption reduces the income that is subject to tax by the exemption amount.
• For 2004, the exemption amount was $3,100. To claim a personal exemption for a spouse,
• the taxpayers must be married by the last day of the year, or
• the spouse must have died during the year, and the taxpayer must not have remarried during the year
• on separate return, if married filing separately, spouse must have no gross income. Dependency Exemptions
Remember that a dependent is a person other than the taxpayer who entitles the taxpayer to claim a dependency exemption.
To claim a dependency exemption, all of the dependency tests must be met. The five dependency tests are:
• member of household or relationship test
• citizen or resident test
• joint return test
• gross income test
• support test
Each dependency exemption reduces the income that is subject to tax by the exemption amount. The exemption amount changes every year.
• For 2004, the exemption amount was $3,100. A taxpayer cannot claim a personal exemption for the taxpayer or the spouse if he or she can be claimed as a dependent on another tax return. | 
