ALL0-9ABCDEFGHIJKLMNOPQRSTUVWXYZ
Share This
Share
« Back to Glossary Index
Categories: General Tax Terms

Tax Exemption

A tax exemption is a monetary exclusion that reduces the amount of income subject to tax. It refers to specific income, transactions, or entities that are not subject to taxation under the law.

For example, certain organizations such as charities, religious institutions, and educational entities may qualify for tax-exempt status, meaning they do not have to pay federal income tax on their earnings. Additionally, specific types of income, like gifts or inheritances, may also be exempt from taxation. Tax exemptions can help reduce the overall tax liability for individuals and organizations, encouraging certain behaviors or providing relief in specific situations.

Related Articles:
  • Glossary: Gift Tax
    Gift Tax is the cheerful fee the IRS collects when you give away big bucks! If your generosity exceeds a certain limit, a little tax might come into play. Share wisely!
  • Glossary: Portability of Estate Tax Exemption
    Portability of Estate Tax Exemption lets surviving spouses inherit unused tax exemptions from their deceased partners, creating a financial safety net for the future!
  • Glossary: Spousal Lifetime Access Trust (SLAT)
    A Spousal Lifetime Access Trust (SLAT) is like a financial love letter! It allows one spouse to gift assets to the other while keeping tax benefits and ensuring future access.
  • Glossary: Federal Estate Tax Exemption
    Federal Estate Tax Exemption is like a financial gift! It allows you to leave a certain amount of money tax-free when you pass on, ensuring your loved ones receive more of your legacy.
  • Glossary: Annual Gift Tax Exclusion
    Annual Gift Tax Exclusion lets you share your wealth with loved ones without worry! Gift up to a certain amount each year tax-free—spreading joy has never been so rewarding!
« Back to Glossary Index