Tax exempt

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Tax Exempt

Describing income or organization that is not subject to taxation. Examples of tax exempt organizations include religious groups and charities. Additionally, certain income an individual or corporation derives may be tax exempt. For example, coupons from a municipal bond are tax exempt at the federal level. See also: Tax credit, tax deduction.

Tax exempt.

Some investments are tax exempt, which means you don't have to pay income tax on the earnings they produce.

For example, the interest you receive on a municipal bond is generally exempt from federal income tax, and also exempt from state and local income tax if you live in the state where the bond was issued.

However, if you sell the bond before maturity, any capital gain is taxable.

Similarly, dividends on bond mutual funds that invest in municipal bonds are exempt from federal income tax. And for residents of the issuing state for single-state funds, the dividends are also exempt from state and local taxes.

Capital gains on these funds are never tax exempt.

Earnings in a Roth IRA are tax exempt when you withdraw them, provided your account has been open for five years or more and you're at least 59 1/2 years old. And earnings in 529 college savings plans and Coverdell education savings accounts (ESAs) are also tax exempt if the money is used to pay qualified education expenses.

When an organization such as a religious, educational, or charitable institution, or other not-for-profit group, is tax exempt, it does not owe tax of any kind to federal, state, and local governments. In addition, you can take an income tax deduction for gifts you make to such organizations.

References in periodicals archive ?
The sales and use tax exemptions for machinery and equipment used directly for the retail sale of a biodiesel blend and E85 motor fuel and fuel delivery vehicles used to distribute such fuels.
Cuomo today outlined new tax exemptions proposed in the 2015-16 Executive Budget that will further the rapid growth of the wine, beer, cider and spirits industries.
Global Banking News-February 5, 2015--Indian central bank calls for higher tax exemptions
Therefore, the provincial assembly recommended the matter to provincial government to further recommend it to federal government to return the three-year tax exemptions (July 2009 to June 30, 2012) granted as announcement of the Prime Minister of Pakistan and withdraw the appeal filed by FBR against the decision of PHC from the Supreme Court and grant income tax exemption to the Khyber Pakhtunkhwa according to its true spirit.
She said she has found that many people are unaware of the tax exemptions and whether they qualify for them.
Many states offer sales tax exemptions to companies that manufacture or are involved in the production or processing of oil and gas.
33 million) in tax revenues due to the first four business tax exemptions on bulk grains.
Whether most or all nonprofit hospitals can survive without various tax exemptions is a key question.
They were earlier given tax exemptions reserved for charitable organisations.
It offers attractive free trade zones, free trade ports and airports and tax exemptions.
If Congress does nothing, estate and gift tax exemptions plummet to $1 million.
Islamabad, Feb 5(ANI): Besides asking Pakistan to increase the power tariffs, the International Monetary Fund (IMF) has also asked the financial crisis-hit country to reduce the tax exemptions in order to overcome the revenue shortfall during the remaining months of the current fiscal year.