Understanding the advantages and disadvantages of tax exempt status is critical to determining whether this is an appropriate business structure for your organization.

The Advantage of Filing a Personal Tax Exemption.

There are a number of pros and cons to becoming tax-exempt. Once exempt from this tax, the nonprofit will usually be exempt from similar state and local taxes. Tax exemption, for nonprofit healthcare and other qualified entities, brings several advantages. Under homesteading tax laws, if you have a home worth $200,000 and you qualify for a $20,000 exemption, you would pay tax as if your home was worth $180,000. Advantages.

A personal exemption varies for individual taxpayers. Understanding the Advantages and Disadvantages of Tax Exempt Status. by Randolf Saint-Leger .

Posted On: November 19, 2013. Tax exemption/deduction: Organizations that qualify as public charities under Internal Revenue Code 501(c)(3) are eligible for federal exemption from payment of corporate income tax. Tax exemption, for nonprofit healthcare and other qualified entities, brings several advantages. Tax‐exempt status results in a multitude of advantages, including the obvious one of not having to pay taxes, such as eligibility for deductible contributions, participation in grant programs, and exemption from other laws. There are several varieties of tax‐exempt healthcare organizations, and, accordingly, the advantages and disadvantages of tax exemption will differ, depending on the particular category.

The Pros and Cons of Having a Nonprofit, Tax-Exempt Organization Establishing a charitable organization can be a great way to provide help for those in need, but you should be aware of the advantages and disadvantages of such a corporation. A homestead exemption for tax purposes allows you to deduct a portion of the value of your home when it comes to assessing various taxes.