NONTAXABLE Meaning and
Definition
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Nontaxable refers to income, assets, or transactions that are not subject to taxation by the government. It encompasses various categories and exemptions specified by tax laws, resulting in a reduction in the taxable burden on individuals, businesses, or other entities.
In the context of income, nontaxable typically refers to earnings that are not included in the calculation of an individual's taxable income. These may include income from certain sources such as scholarships or grants, life insurance proceeds, gifts, inheritances, or certain Social Security benefits.
There are also nontaxable assets, which are possessions or investments that do not generate taxable income or are exempt from taxes when sold or transferred. These can include holdings such as municipal bonds, which are exempt from federal income taxes, or qualified retirement accounts like a Roth IRA, where withdrawals are not subject to taxation.
Furthermore, nontaxable transactions involve circumstances where no sales or use tax is required to be paid. Examples can include purchases made for nonprofit organizations, certain medical expenses, or the exchange of like-kind property.
Understanding nontaxable provisions and properly documenting and reporting them is crucial for taxpayers and organizations to ensure accurate compliance with tax regulations.
Top Common Misspellings for NONTAXABLE *
* The statistics data for these misspellings percentages are collected from over 15,411,110 spell check sessions on www.spellchecker.net from Jan 2010 - Jun 2012.
Other Common Misspellings for NONTAXABLE
Etymology of NONTAXABLE
The word nontaxable is formed by combining the prefix non- meaning not or without with the word taxable. Taxable comes from the Latin word taxabilis, which is derived from the verb taxare meaning to tax or to appraise. So, nontaxable essentially means not subject to taxation.
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