Tax-Deferred Account

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Tax-Deferred Account

1. See: 401(k).

2. See: Traditional IRA.
References in periodicals archive ?
A tax deferred account growing at an annual rate of 7.
On the other hand, if the individual withdrew $50,000 from a tax deferred account and $50,000 from a tax-free or fully taxable account, which doesn't count as earned income, the investor would be in the 15 percent tax bracket.
In short, whatever gains are not from a tax deferred account, such as an IRA or 401k, is fair game for the Internal Revenue Service.
A step-by-step explanation of the worksheet mechanics of adjusting the tax deferred account for a constantly changing tax basis is beyond the size limitations of this discussion; but one important point should be made.
One is to invest as you did before you had children, with assets in taxable and tax deferred accounts, under your own names.
For instance, the client's tax rate should be considered, he says, adding that, in most cases, it makes sense to draw from taxable accounts before dipping into tax deferred accounts.
Basically, there is now an increased incentive to hold dividend-paying and higher-risk/return long-term equity investments outside of tax deferred accounts, and ordinary income, safety-oriented investments (such as taxable bonds, certificates of deposit, treasuries, etc.