Tax-exempt entities

Tax-exempt entities are organizations that do not have to pay federal income taxes because of their specific purpose. Common examples include charities, educational institutions, and religious organizations. These groups must meet certain criteria set by the IRS to qualify, usually by serving the public interest or promoting social welfare. As a result, they can use more of their donations and income to fund their activities rather than paying taxes. Additionally, donations made to these entities are often tax-deductible for the donor, providing an incentive for charitable giving.