Martin Taxer
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Dipl.-Ing. Thomas Taxer
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What does "exemption" mean on the 1040 tax form?
Q. I'm an independent contractor and I'm filling out my 1040 tax form, but in the "Exemption" section of the form, what does it mean by "(check box) Yourself. If someone can claim you as a dependent, do not c heck box 6a..." I am single with no children..do I need to check this box? Thank you :)
Asked by xyz - Fri Apr 4 23:26:03 2008 - United States - 3 Answers - Comments

A. Generically, an "exemption" is something that excludes certain things from from something else. In this case, a "tax exemption" allows a certain amount of your income to legally avoid taxation. Specifically, "exemption" on the 1040 tax form is the count of the number of dependents or other people (such as children) who are financially dependent on you. This number (i.e., "tax exemptions") is used to determine how much of your income can legally avoid taxation. If you are single with no children then, you (usually) have no other exemptions besides yourself.
Answered by Brian J - Sat Apr 5 08:33:30 2008

I'm going back to school. I'll be changing my W-4 to reflect as such. What does "tax exemption" mean?
Q. I'm trying to understand what will change. I still have to pay income tax, correct? Will I be paying at a reduced rate? Will I get more back when I file at the end of the year? Or will nothing really change? I am not a dependent. I'm 27.
Asked by Stephanie W - Tue Nov 3 09:27:14 2009 - United States - 5 Answers - Comments

A. You still pay taxes on your earnings. You might be eligible for a tax credit, but still have to file annual returns, pay withholding, etc. "Exempt" on W-4 means exempt from withholding. You only qualify as exempt if you paid absolutely NO income taxes the prior year, received a FULL refund of every cent of withholding for the prior year, and you expect ZERO tax liability for the coming year. In other words, your income has to be so low that you paid no taxes last year, and will not have to pay any for the coming year either. Hard to qualify. Serious penalties for underwithholding and/or filing "exempt" when you are not.
Answered by ibu guru - Tue Nov 3 09:34:00 2009