Exemption

Anything that can be written off on federal tax returns. You can claim a personal deduction, or exemption, for you, your spouse or any qualifying dependents. In 2008, exemptions are worth $3,500 for each exempt individual. The phase-out for personal exemptions will begin at $159,950 for individual returns in 2008 and at $239,950 for joint returns. Different types of businesses and non-profit organizations can also claim exemptions, depending on the type and purpose of the entity, sources of income and other factors. Exemptions can also be made for property tax or other local taxes. Usually, educational or academic institutions are tax exempt.