United States Federal Income Tax Personal Exemption
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A deduction for a Personal Exemption amount for the individual taxpayer, the taxpayer's spouse, and the taxpayer's child or other dependent for purposes of calculating a U.S. taxpayer's federal income tax is provided in the Internal Revenue Code at 26 U.S.C. § 151. The personal exemption is allowed in the form of a deduction against the taxpayer's income in the computation to arrive at the taxable income amount against which the tax rates are applied to compute the income tax under 26 U.S.C. § 1.
The personal exemption amount in 1894 was $4,000 (which would be equivalent to over $80,000 in 2005 dollars). That tax was declared unconstitutional in 1895. The tax in its present form which began around 1913 had a personal exemption amount of $3,000 (still over $57,000 in 2005 dollars), or $4,000 for married couples.
Over time the amount of the exemption has increased and decreased depending on political policy and the need for tax revenue. Since the Depression, the exemption has increased steadily, but not enough to keep up with inflation.[citation needed]
The exemption amounts for years 1987 through 2007 are as follows:
| Tax Year | Deduction Amount |
|---|---|
| 1987 | $1,900 |
| 1988 | $1,950 |
| 1989 | $2,000 |
| 1990 | $2,050 |
| 1991 | $2,150 |
| 1992 | $2,300 |
| 1993 | $2,350 |
| 1994 | $2,450 |
| 1995 | $2,500 |
| 1996 | $2,550 |
| 1997 | $2,650 |
| 1998 | $2,700 |
| 1999 | $2,750 |
| 2000 | $2,800 |
| 2001 | $2,900 |
| 2002 | $3,000 |
| 2003 | $3,050 |
| 2004 | $3,100 |
| 2005 | $3,200 |
| 2006 | $3,300 |
| 2007 | $3,400 |
The personal exemption is reduced (in some cases totally eliminated) for taxpayers with income above approximately $130,000.
[edit] Sources
- Years 1987 through 2006, Internal Revenue Service, Instructions for Form 1040 (for each listed year)
- Year 2007, Internal Revenue Service, Rev. Proc. 2006-53 (Nov. 9, 2006).
- http://www.taxpolicycenter.org/TaxFacts/TFDB/TFTemplate.cfm?Docid=169
- Year 1913 and 1894, http://www.answers.com/topic/income-tax , American History section
- http://www.westegg.com/inflation/
