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Section: exemption definition
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An exemption is a rule or law which excepts certain things from another rule or law. For example:

  • A grandfather clause , in the modern use of the U.S. term, is an exemption that allows a pre-existing condition to continue, even if such a condition is now prohibited from being begun anew.
  • A tax exemption allows a certain amount of income or other value to legally avoid taxation .
  • Particularly in the US , an exempt employee is one who is not entitled to overtime pay.
  • A student may elect to try for an exemption from a class , if he or she already knows the material from previous work at another school or job . An exemption exam is usually taken by the student as proof of this knowledge.

 

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More must know tax terms
CPA - Certified Public Accountant
federal income tax
(AGI) Adjusted Gross Income
Tax credits
Deductable

Standard Deductions

Itemized Deductions
Exemption

Progressive Taxation

Taxable Income
Voluntary Compliance
Withholding