FAQ about zakah and how Azzad calculates it

Here is some background info on zakah and purification, how Azzad calculates it, and the answers to a few frequently asked questions. Zakah is a financial obligation that every Muslim must pay if they own certain assets that are worth more than a certain amount, called the nisab, if they have owned those assets for at least a period of 12 lunar months, called the hawl. Every year, Azzad calculates zakah due on our clients’ accounts with us. Calculations are performed on 23 Sha’ban to give us time to prepare and send individual statements for clients to receive during Ramadan, when many Muslims choose to pay their zakah. We consider the following when calculating zakah: Whether the investments held in the account are intended for trade or for generating income. Whether the accounts are tax-deferred, taxable, or non-taxable. Any taxes or penalties that would become due if the accounts were to be liquidated and the money withdrawn by the account holder. Any tax calculations are based on the account owner’s federal and state tax bracket. Any penalty calculations are based on the account owner’s age. Asset that qualify as purification (see next section) are excluded from the zakatable total.