My question is: do the numbers below include the personal exemption?

I found this tax data for 2016:

Table 2. 2016 Standard Deduction and Personal Exemption (Estimate)

    Filing Status Deduction Amount


    Married Filing Jointly

    Head of Household

    Personal Exemption

For example, if my salary were to be 50k and I were filing single, am I taxed on:

A) $39,650 ($50,000-$6,300-$4,050) or

B) $43,700 ($50,000 - $6,300)

I'm trying to keep this example as simplistic as I can, so I'm not assuming any additional circumstances (mortgage interest or student loan interest refunds, 1 allowance, itemization, etc.)

  • The two are both applied, though the "standard deduction" may be replaced with "itemized deductions" if appropriate. Beyond that, it's unlikely to cause trouble, but read your W-4 carefully. Note that you put your signature on it because you declare the numbers to be correct "Under penalties of perjury...". I've never known a problem to come out of it unless you go overboard. Claiming only (1) when you could legally claim (2), for example, is common enough. – user2338816 Mar 16 '16 at 8:33

The personal exemptions are separate from the deductions.

Personal exemptions are based on the number of people in your household. If you are single with three kids all living under one roof, you would generally claim 4 exemptions, or $4050 * 4 = $16,200.

The standard deduction is based on your filing status. If you file as single, you can deduct $6,300 through the standard deduction, without listing your deductions. Alternatively, if you have more deductible expenses than your standard deduction, you can itemize your deductions on Schedule A and deduct the actual expenses. If you itemize, you don't take the standard deduction anymore, but you still claim your exemptions.

To answer your example question explicitly, the answer is A. Both the standard deduction amount and the personal exemption amount get subtracted from your income before taxes are calculated.

  • 1
    @DukeLuke Not exactly, although they are related. When you tell your employer you only have one allowance, you are telling them that you want them to withhold taxes from your check as if you will be claiming one exemption on your taxes at the end of the year. However, the number you give your employer and the number you claim on your tax return do not have to match. See this question and this question for more details. – Ben Miller - Remember Monica Mar 15 '16 at 19:27
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    @DukeLuke Basically, the number you claim on your tax return has to be correct, but you do not have to give your employer this same "correct" number. You can adjust the number you give to your employer up or down to adjust the amount of tax that is withheld from your check, if you need to. – Ben Miller - Remember Monica Mar 15 '16 at 19:28
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    So, if I'm single and have no children, I can only claim "1" for personal deductions when I file, but I can tell my employer "2, etc" in order to have less taxes withheld to minimize the amount of my money the government holds on to until the end of the year? – DukeLuke Mar 15 '16 at 19:30
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    @DukeLuke Yes. If you have reason to believe that you will be getting a large tax refund (perhaps because you have more deductions than average), you can tell your employer that you want them to withhold based on 2 allowances instead of 1. They will withhold less tax. On your tax return, you would still claim "1", the correct number. – Ben Miller - Remember Monica Mar 15 '16 at 19:34
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    @DukeLuke allowances are not personal exemptions. there's a correlation, but there are separate terms for a reason. You use your allowances to control how much will be withheld (how much tax you'll pay as you go), but if you need to pay more tax - you'll reduce your allowances (for example - to account for capital gains), and if you need to pay less tax - you'll increase them (for example to account for large itemized deductions/losses). – littleadv Mar 16 '16 at 2:47

Personal exemption and standard deduction are two unrelated things. You can replace the standard deduction with itemized list of deductions (using Schedule A for it), the personal exemption is a constant number.

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