5. Who were exempted from tax and why?
Answers
Answer:
tax is the extra amount we pay to government.
Explanation:
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Answer:
Explanation:
What is a tax exemption?
A tax exemption is the right to exclude all or some income from taxation by federal or states governments. Most taxpayers are entitled to various exemptions to reduce their taxable income, and certain individuals and organizations are completely exempt from paying taxes.
Deeper definition
Tax exemptions are related to but distinct from tax deductions. A tax deduction is a portion of taxable income that may be excluded from taxation when certain conditions are satisfied, while a tax exemption constitutes income that is not subject to taxation in the first place. Meanwhile, a tax credit is applied to reduce the amount of tax owed, independent of taxable income.
Tax-exempt organizations
The government typically exempts organizations from income tax entirely when they serve the public good, such as religious or charitable organizations. The government eliminates the tax burden of certain organizations it helps them further promote public welfare.
In the United States, non-profit organizations are typically exempt from federal taxes. These organizations include charities, churches, schools, and labor unions. Non-profit tax exemptions depend on several factors, such as purpose, activities, and sources of income. State tax laws vary; however, such organizations are generally exempt from state income and property taxes, and sometimes sales tax.
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