Dependents
A dependent is a person (other than the taxpayer themselves or their spouse) for whom the taxpayer can claim a dependency exemption. Each dependency exemption lowers the amount of income that can be taxed. For 2011, the exemption amount is $3,700 for each qualifying dependent.
The term “dependent” refers to a qualifying child or relative, determined by various dependency tests. If you are a full-time college student, you may still be claimed as a dependent on your parent’s tax return.
A dependent may have to file their own tax return, based on their gross income, earned income, and unearned income. In general, dependents must file a return if their gross income was more than $2,400, their earned income was more than $7,250, and their unearned income was more than $2,400. If a dependent is required to file a return and cannot, it is the responsibility of their parent (or legal guardian) to file it for them.
Personal Exemptions
Taxpayers are allowed to claim a personal exemption for themselves, as well as for any dependents they support. A personal exemption is similar to a tax deduction because it lowers your taxable income.
Note that if you are claimed as a dependent on someone else’s tax return, you cannot claim a personal exemption for yourself (because then the IRS would essentially be counting you twice). . This applies even if the person chooses not to claim you as a dependent. If your spouse can be claimed as someone else’s dependent, you and your spouse must file separate tax returns.
For 2010 the personal exemption amount was $3,650. For 2011 the personal exemption amount is $3,700. And for 2012 the amount will increase to $3,800.
In order to claim someone as a dependent on your tax form, you must be providing at least half of that person’s support. The gross income of this dependent must be less than the personal exemption amount for that tax year. However, if the individual is under 19, or under 24 and a full-time student, they may still be claimed as a dependent on their parent’s/guardian’s tax return. Married couples can file a joint tax return and each can claim themselves as a personal exemption on the return, even if one spouse earned no income in that year. (This is partially why filing a joint return is a common tax strategy for couples.)
