My personal exemption went from $10,240 to $2,916. Why such a huge drop? Only difference is that one of my two children had summer internship income greater than $6000.

donmahoney35 — Thu, 06 Jun 2019 13:18:38 GMT

Personal Exemption went WAY down - more than $7000 - in 2016. My wife and I are filing jointly had have two children, both under 22 and both full-time students. The only thing that changed is that my son had summer internship income greater than $6,000.

Without examining your return, it's impossible to say exa...

ClarkeB — Thu, 06 Jun 2019 13:18:39 GMT

Without examining your return, it's impossible to say exactly what caused your personal exemption to decrease. However, there's a high probability that at least one reason is listed below.

If your refund is wildly off, it's possible you simply mistyped a dollar amount somewhere. An extra digit here, a missing number there, even something as seemingly insignificant as a misplaced decimal point can have an eye-popping effect on your TurboTax refund.

Changes in your income or tax rate

You (or your spouse) took on an additional job (especially non-wage income which is taxed at the higher self-employment tax rate);
Your salary or wages increased but your W-4 stayed the same;
You sold investments but didn't take out any taxes from the sale;
Your filing status changed from last year;
You started receiving Social Security benefits or Roth IRA distributions;
You received taxable unemployment income;
You had gambling winnings;
You're paying a penalty for not having health insurance coverage in 2016.

Loss of credits or deductions

Your child turned 17 in 2016, causing you to lose the $1,000 Child Tax Credit;
Your child turned 19 in 2016 (or 24, if a full-time student) and no longer qualifies as a dependent;
You paid off your mortgage and can no longer deduct mortgage interest;
You took the itemized deduction last year (for example because of high medical bills) but got the standard deduction this year;
You didn't qualify for the Earned Income Credit this year;
You paid off your student loan and can no longer deduct the interest;
You're no longer eligible for certain education credits (or you took a different credit this year)
You didn't contribute to a Traditional IRA (or couldn't take the full deduction because your income was too high).

topic Without examining your return, it's impossible to say exa... in Retirement tax questions

My personal exemption went from $10,240 to $2,916. Why such a huge drop? Only difference is that one of my two children had summer internship income greater than $6000.

Without examining your return, it's impossible to say exa...