An exemption is a deduction allowed to a taxpayer based on their status or circumstances, reducing the amount of income subject to taxation. Exemptions can apply in various contexts including personal income tax, homestead exemptions, and the alternative minimum tax.
A homestead refers to a house and the surrounding land that is owned and used as a dwelling. Under modern homestead exemption laws enacted in most states, any property designated as a homestead is exempt from execution and sale by creditors in case of bankruptcy.
A homestead exemption is a legal provision that reduces the taxable value of a homeowner's primary residence, effectively decreasing the property tax burden.
