What are personal exemptions designed to do?

Personal exemptions are designed to reduce taxable income for the taxpayer and dependents, which effectively lowers the amount of income that is subject to taxation. By allowing taxpayers to claim personal exemptions, the tax code acknowledges the financial burden of supporting oneself and dependents, thereby providing a form of relief. This reduction in taxable income can lead to a lower overall tax liability, making it easier for taxpayers to manage their finances and support their families.

While personal exemptions do not provide tax credits, they directly impact the amount of income that is taxable. This feature makes personal exemptions a valuable aspect of the tax system, aimed at providing equitable treatment for those with dependents or individual financial obligations.