exemption (redirected from exemptions)

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.

Notes:

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.

See also: Deduction, Dependent, Exempt Income, Tax Credit

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Exemption

Direct reductions from gross income allowed by the IRS.

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exemption

An annual deduction permitted a taxpayer and each dependent for use in computing taxable income. An extra exemption is allowed for being blind or for being 65 years of age or older. The size of the annual exemption is altered each year according to the level of inflation. Also called personal exemption.