From William Perez,
Your Guide to Tax Planning: U.S..
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You are entitled to claim a personal exemption in the amount of $3,400 for yourself, your spouse, and each of your dependents. Look on Form 1040, Line 6d ("Total number of exemptions claimed"). Multiply this number by $3,400, and put the total on Line 42.

You cannot claim your own personal exemption if someone else can claim you as a dependent.

Personal exemptions work just like adjustments to income and the standard or itemized deductions. Personal exemptions reduce your taxable income, thereby reducing your total tax.

Personal exemptions are phased out if your adjusted gross income exceeds a certain threshold.

• Single: $156,400
• Head of Household: $195,500
• Married Filing Jointly: $234,600
• Married Filing Separately: $117,300
• Qualifying Widow/Widower: $234,600

If your adjusted gross income exceeds these amounts, you need to calculate your personal exemptions using the Deductions for Exemptions Worksheet, in the Instructions for Form 1040 (PDF) on page 33.

More information from About.com:
Figuring Your Tax

Claiming Your Personal Exemptions

Standard Deduction

Itemized Deductions

Form 1040 Essentials