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Business Definition for: tax deferred
tax deferred
term describing an investment whose accumulated earnings are free from taxation until the investor takes possession of them. For example, the holder of an Individual Retirement Arrangement (or Account) (IRA) postpones paying taxes on interest, dividends, or capital appreciation if he or she waits until after age 591/2 to cash in those gains. Other examples of tax-deferred investment vehicles include keogh plans ; annuitize ; variable life insurance , whole life insurance and universal life insurance ; stock purchase or Dividend Reinvestment Plan (DRP) ; Simple IRAS ; salary reduction plans and Series EE and Series HH U.S. Savings Bonds .
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