Exempt (from withholding)
Exempt (from withholding) is a term used to describe a situation in which an individual or entity is not required to pay taxes on certain income. This can be due to a variety of reasons, such as being a member of a certain group or having a certain type of income. In some cases, the exemption may be temporary, while in others it may be permanent. In either case, the individual or entity is not required to pay taxes on the income that is exempt.
History of Exempt (from withholding)
The concept of exempt (from withholding) has been around for centuries. In the United States, the first federal income tax was enacted in 1862, and exemptions from taxation were included in the law. Since then, the concept of exempt (from withholding) has been used in various forms, including exemptions for certain types of income, such as Social Security benefits, and for certain groups of people, such as veterans and members of the military. In addition, some states have their own exemptions from taxation.
Comparison of Exempt (from withholding) and Non-Exempt Income
| Type of Income | Exempt (from withholding) | Non-Exempt Income |
|---|---|---|
| Social Security Benefits | Exempt | Taxable |
| Veterans’ Benefits | Exempt | Taxable |
| Interest Income | Taxable | Taxable |
| Capital Gains | Taxable | Taxable |
Summary
Exempt (from withholding) is a term used to describe a situation in which an individual or entity is not required to pay taxes on certain income. This can be due to a variety of reasons, such as being a member of a certain group or having a certain type of income. In some cases, the exemption may be temporary, while in others it may be permanent. For more information on exempt (from withholding) income, visit the Internal Revenue Service website or consult a tax professional.
See Also
- Tax Exemption
- Taxable Income
- Tax Credits
- Tax Deductions
- Taxable Benefits
- Taxable Wages
- Taxable Interest
- Taxable Gains
- Taxable Losses
- Taxable Property
