A direct reduction taken from taxable income for a specific reason, as allowed by the IRS.

Also called tax exemption.

Use exemption in a sentence

Mostly non-profit organizations that have a 501 (c) 3 status can claim an exemption from income tax and in some states, from sales tax.

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I got an exemption form all the donations I made to different churches and non profit organizations, so its almost like I lost no money at all!

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The Church of Scientology can get a tax exemption for being a religious organization as long as their proceeds benefit their members or the community not the organization itself.

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Alternative Minimum Tax over-55 home sale exemption