Contributions made to any form of retirement or investment account on an after-tax basis is the common form of contributions. Most investors prefer the thought of not paying taxes on the principal when they make a withdrawal from the investment. After-tax contributions would be beneficial if tax rates are expected to be higher in the future.
Contributions made to a tax deferral account require the individual to claim these contributions on their income tax filing each year, which entitles the tax payer to a refund based on their contributions at the going tax rate.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Tax forms in the United States — are used by taxpayers and tax exempt organizations to report financial information to the Internal Revenue Service (IRS). They are used to report income and calculate taxes owed to the government of the United States. TOC Federal tax forms 990… … Wikipedia
Tax-Free Savings Account — The Tax Free Savings Account or TFSA was introduced by Jim Flaherty, Canadian federal Minister of Finance, in Budget 2008. It was a significant measure in the budget and will be coming into effect on January 1st, 2009. [“Get ready for new Tax… … Wikipedia
Tax — Taxation An aspect of fiscal policy … Wikipedia
tax — A charge by the government on the income of an individual, corporation, or trust, as well as the value of an estate or gift. The objective in assessing the tax is to generate revenue to be used for the needs of the public. A pecuniary burden laid … Black's law dictionary
Tax Reform Act of 1986 — The U.S. Congress passed the Tax Reform Act (TRA) of 1986, (USStatute|99|514|100|2085|1986|10|22) to simplify the income tax code, broaden the tax base and eliminate many tax shelters and other preferences. Although often referred to as the… … Wikipedia
Contribution margin — Decomposing Sales as Contribution plus Variable Costs. In the *****Cost Volume Profit Analysis model, costs are linear in volume. In cost volume profit analysis, a form of management accounting, contribution margin is the marginal profit per unit … Wikipedia
Tax deduction — This article is about the deduction of expenses for the purpose of calculating taxable income. For tax deducted at source, see Withholding tax. Taxation An aspect of fiscal policy … Wikipedia
Charitable contribution deductions in the United States — Charitable contribution deductions for United States Federal Income Tax purposes are defined in section 170(c) of the Internal Revenue Code as contributions to or for the use of certain nonprofit enterprises. See 26 U.S.C. § 170(c).… … Wikipedia
Economic Growth and Tax Relief Reconciliation Act of 2001 — The Economic Growth and Tax Relief Reconciliation Act of 2001 (USPL|107|16, USStat|115|38, June 72001), was a sweeping piece of tax legislation in the United States. It is commonly known by its abbreviation EGTRRA, often pronounced egg tra or egg … Wikipedia
Retirement Contribution — A monetary contribution to a retirement plan. Retirement contributions can be pretax or after tax, depending on whether the retirement plan is qualified, how much the contribution is in relation to the contributor s income, and whether the… … Investment dictionary