Tax Exemption: An amount that a taxpayer who meets certain criteria can subtract from taxable income. Examples include exemptions for each dependent or for life insurance proceeds. (See Tax Credit, Tax Deduction.)

 

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Tax Exemption: An amount that a taxpayer who meets certain criteria can subtract from taxable income. Examples include exemptions for each dependent or for life insurance proceeds. (See Tax Credit, Tax Deduction.)

Tax Deduction: A direct dollar-for-dollar reduction in tax allowed for expenses such as child care and R&D for building low-income housing. Compare tax deduction.

Tax Credit: A tax credit is an amount you can subtract from the tax you would otherwise owe. Unlike a deduction or exemption, a credit is a dollar-for-dollar reduction of your tax bill. For example, if . . . View Full Definition

Tax Equity And Fiscal Responsibility Act Of 1982 (TEFRA): The view that shareholders prefer capital gains over dividends, and hence low payout ratios, because capital gains are effectively taxed at lower rates than dividends.

Tax Evasion: Legislation to increase tax revenue by eliminating various taxation loopholes and instituting tougher enforcement procedures in collecting taxes.

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 . . . View Full Definition

Tax Differential View (Of Dividend Policy): Allowing the capital gains tax on an asset to be payable only when the gain is realized by selling the asset.

Tax Deferred: A tax-deferred account allows you to postpone income tax that would otherwise be due on employment or investment earnings you hold in the account until some point the future, often when you . . . View Full Definition

Tax Credits: Tax you receive back in certain circumstances, e.g. pension credit, child tax credit and working tax credit.

Tax Deed: An instrument, similar to a certificate of sale, given to a purchaser at a tax sale.