Exemption
Definition of 'Exemption'A deduction allowed by law to reduce the amount of income that would otherwise be taxed. An exemption is based on a status or circumstance rather than economic standing. |
|
Investopedia explains 'Exemption'There are two types of exemptions: personal and dependency.An example of an exemption is the reduction in taxes you are granted for the dependent children (under the age of 18) living with you. |
Related Definitions
Articles Of Interest
-
Next Season, File Taxes On Your Own
Master these fundamentals and you'll be doing your own taxes with minimal stress. -
Deducting Losses On Your IRA Investments
In regular accounts in which taxes are not deferred, losses on investments can be included on your tax return. Find out how. -
Is it true that you can sell your home and not pay capital gains tax?
It is true in most cases. When you sell your home, the capital gains on the sale are exempt from capital gains tax. Based on the Taxpayer Relief Act of 1997, if you are single, you will pay no ... -
Has Income Tax Become A Class Tax On The Poor?
With more than 33% of American families falling close to the poverty line despite their adult members holding full-time employment, a rising number of citizens are being forced to pay a rate ... -
Possible Effects Of The Online Retail Tax
The U.S. Senate has passed a bill that will impose a sales tax on online retailers. Discover how the Marketplace Fairness Act could affect your bottom line. -
How To Get The Most Out Of Hiring An Accountant
When you hire an accountant, getting good tax advice going forward is as valuable as – or perhaps even more valuable than - getting the previous year’s taxes filed correctly. Learn what you need ... -
How The 2014 Obama Budget Could Affect Your Finances
Depending on which estimate you believe, Obama's proposed budget would raise the tax bill of a household with a yearly income of $50,000 to $75,000 between $63 and $100 per year. However, that’s ... -
6 Financial Benefits Of Spring Cleaning
This year, combine your spring cleaning strategies with your big-picture financial objectives. -
IRS Special Enrollment Examination (SEE) Study Guide
The enrolled agent status is the highest credential awarded by the IRS. -
Inaccurate Tax Return, Now What?
If the IRS finds errors, it will cost you. Find out how to fix them, and how to prevent them in the first place.
Free Annual Reports