Some people do not like paying taxes each year and others do not mind. In either case, many people will do what they can to save a little extra money here or there when financial times are tough amidst the coronavirus. When you are struggling to pay your bills or buy groceries, then you may find relief through tax exemption. However, if your financial situation has worsened to the point of bankruptcy, then consider seeking guidance from a Tennessee Bankruptcy Attorney.
Who is Tax-Exempt in Tennessee?
Tennessee tax exemption means you do not have to pay taxes for a particular thing. Items and organizations are the two main things that have the potential to be tax-exempt depending on additional factors like what state you live in, what organization you work for, and financial factors.
You can use tax exemption to decrease your overall tax bill for income tax, reduce taxes on gifts or estates, and any income you make from certain organizations. When it comes to income tax exemptions, you have three main options:
- Claim deductions for a lower adjusted gross income
- Claim a personal exemption for you and your immediate family
- Use your built-up credits to reduce taxes
Those with disabilities usually receive disability benefits each month that are tax-free. Life insurance proceeds are also tax-exempt. In terms of tax exemption, gifts often mean married couples can give each other gifts that are tax-exempt for up to $15,000 a year. Estate taxes involve inheritances passed on to loved ones and property taxes. Inheritances are tax-exempt from estate taxes and certain people like veterans, disabled, and senior citizens are exempt from paying property taxes.
Organizations that are usually tax-exempt are non-profit, churches, charities, credit unions, schools, clubs, and social welfare organizations. Knowing when you are being taxed when you should not be is important for increasing your finances.
Steps to Apply for a Tennessee Tax-Exempt Status
If your organization has been taxed when your organization should not have been taxed, you can try applying for a Tennessee tax exemption status through the Internal Revenue Service (IRS) main website. This is for organizations that are classified as a trust, association, or corporation. Nonprofit organizations are encouraged to apply.
All you have to do is follow the outlined steps on the IRS website that require certain documents from your organization, your state registration requirements, and your employer ID number (EIN). If you are unsure whether your organization qualifies, then feel free to look at other resources on the IRS webpage or talk with a lawyer who has experience with finances. It can also help to look into Tennessee savings tips.
Bankruptcy Lawyer in Chattanooga, TN
Do not hesitate to reach out to our legal team in Chattanooga, Tennessee, and North Georgia if you have any questions or concerns about falling into bankruptcy. You can call Tom Bible Law today at (423) 424-3116 to speak with a Bankruptcy Lawyer in Tennessee for a free consultation. Our legal team of Tennessee bankruptcy attorneys is located in Chattanooga, Kingsport, and Tullahoma.