What is a personal exemption?
A personal exemption is one of the two types of exemptions you can claim to lower your taxable income (the other exemption being one for dependents). Most taxpayers can claim a personal exemption for themselves, and if they are married they may be able to claim a second exemption for their spouse.
If you are single, or married and filing separately, you can claim a personal exemption for yourself unless you can be claimed as a dependent by another taxpayer. Even if that taxpayer does not actually claim you as a dependent on their tax return, if they could, you cannot claim a personal exemption for yourself. However, if you are married and filing jointly, you can always take a personal exemption for yourself, regardless of whether another taxpayer could claim you as a dependent.
For the 2006 tax year, claiming a personal exemption means you get to deduct $3,300 from your gross income.