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 ?
ISLAMABAD -- The Federal Board of Revenue tax exemptions widened by nearly 80 per cent to Rs972.4 billion in the outgoing fiscal year from Rs540.98bn the preceding year, noted the Economic Survey 2018-19.
ISLAMABAD -- In an unprecedented development, the tax exemptions given to various sectors of the economy have gone up to Rs972.4 billion during current fiscal year.
The Rs972.4-billion tax exemptions during fiscal year 2018-19 pose a question mark over the work of the Federal Board of Revenue (FBR), which never disclosed actual quantum of these losses during previous years.
The program provides sales and use, occupancy, food, airline, gas, and utility tax exemptions to eligible foreign officials on assignment in the United States.
IDA financial incentives for the project include $4,752,563 in sales tax exemptions and $2,520,000 in mortgage recording tax exemptions
Justice Ijazul Ahsan said the Federal Board of Revenue (FBR) grants tax exemptions and further said that local DTH boxes should be affordable for consumers.
In response, Justice Ijazul Ahsan said that tax exemptions come under the mandate of the Federal Board of Revenue (FBR) and added that local DTH boxes should be introduced at affordable prices.
'We expect that the number will keep growing next year since we have tax exemptions as well as a decentralised registration policy,' said Kim Leng, who continued that SME registration will profit the owner with tax exemptions, technical training and financial access.
The tax exemptions have been allowed on the following perquisites and allowances provided or granted by government to the ministers of the federal government, namely:-
In fact, the introduction of tax exemptions means resignation from a part of tax revenue.
At least two senators protested on Wednesday what seemed to be 'magic' in the proposed tax reform measure when a provision that would have lifted the tax exemptions on local coals suddenly disappeared in the approved report of the bicameral conference committee.