Tax Deferred Definition

You are seeing definition of Tax Deferred in Tax Terms Dictionary

Maybe this is not completely definition of Tax Deferred but this is the best definition of Tax Deferred at this time that we found. In future, this definition of Tax Deferred can be modified, please visit our Tax Terms Dictionary more frequently to get latest information.

Home » Tax Terms Dictionary » Tax Terms Dictionary » Tax Deferred

Definition Of Tax Deferred:

Investment earnings such as interest, dividends or capital gains that accumulate tax free until the investor withdraws and takes possession of them.
The most common types of tax-deferred investments include those in individual retirement accounts (IRAs) and deferred annuities.By deferring taxes on the returns of an investment, the investor benefits in two ways. The first benefit is tax-free growth: instead of paying tax on the returns of an investment, tax is paid only at a later date, leaving the investment to grow unhindered. The second benefit of tax deferral is that investments are usually made when a person is earning higher income and is taxed at a higher tax rate. Withdrawals are made from an investment account when a person is earning little or no income and is taxed at a lower rate.

Other Definition Of Tax Terms:

For your more easier in looking up our financial terms dictionary, we classified definitions of financial terms in several types. Please select one type below:
Money | Income | Debit | Forex Broker | Price | Insurance | All Types

Thank you for visiting Tax Dictionary website. We are conituning to upadate more Tax terms to Tax Dictionary. Please visit this website usually to get new definitions of Tax terms. We also provide some more dictionaries, you can find out as below:
Medical Dictionary | Law Dictionary | Legal Dictionary | Business Dictionary | Financial Dictionary | Computer Dictionary | Slang Dictionary