Tax-deferred meaning
Of or relating to an investment that is not liable to taxation until income is withdrawn or an appointed date is reached.
adjective
Of or relating to the income that such an investment generates prior to becoming subject to taxation.
adjective
A situation in which taxes will have to be paid at some point in the future, but they are not paid now. An example of a tax-deferred investment is an Individual Retirement Account (IRA), whose earnings accumulate tax free. When the funds are withdrawn after the IRA owner reaches age 59⁄, taxes have to be paid on the withdrawn funds.