Definitions for tax advantage
tax ad·van·tage

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1. tax advantagenoun

   an advantage bestowed by legislation that reduces a tax on some preferred activity

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1. Tax advantage

   Tax advantage refers to the economic bonus which applies to certain accounts or investments that are, by statute, tax-reduced, tax-deferred, or tax-free. Governments establish the tax advantages to encourage private individuals to contribute money when it is considered to be in the public interest. An example is retirement plans, which often offer tax advantages to incentivize savings for retirement. In the United States, many government bonds may also be exempt from certain taxes. In countries in which the average age of the population is increasing, tax advantages may put pressure on pension schemes. For example, where benefits are funded on a pay-as-you-go basis, the benefits paid to those receiving a pension come directly from the contributions of those of working age. If the proportion of pensioners to working-age people rises, the contributions needed from working people will also rise proportionately. In the United States, the rapid onset of Baby Boomer retirement is currently causing such a problem. In order to reduce the burden on such schemes, many governments give privately funded retirement plans a tax advantaged status in order to encourage more people to contribute to such arrangements. Governments often exclude such contributions from an employee's taxable income, while allowing employers to receive tax deductions for contributions to plan funds. Investment earnings in pension funds are almost universally excluded from income tax while accumulating, prior to payment. Payments to retirees and their beneficiaries also sometimes receive favorable tax treatment. In return for a pension scheme's tax advantaged status, governments typically enact restrictions to discourage access to a pension fund's assets before retirement.

Matched Categories

1. • Advantage

How to pronounce tax advantage?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say tax advantage in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of tax advantage in Chaldean Numerology is: 4

2. Pythagorean Numerology

   The numerical value of tax advantage in Pythagorean Numerology is: 3

Examples of tax advantage in a Sentence

1. Environment Minister Segolene Royal:

   We need to start preparing our move out of diesel right now, we should phase out diesel's (tax) advantage over five years.