Tax Shelter

Tax Shelter
A legal method of minimizing or decreasing an investor's taxable income and, therefore, his or her tax liability. Tax shelters can range from investments or investment accounts that provide favorable tax treatment, to activities or transactions that lower taxable income. The most common type of tax shelter is an employer-sponsored 401(k) plan.

Tax authorities watch tax shelters carefully. If an investment is made for the sole purpose of avoiding or evading taxes, you could be forced to pay additional taxes and penalties. Tax minimization (also referred to as tax avoidance) is a perfectly legal way to minimize taxable income and lower taxes payable. Do not confuse this with tax evasion, the illegal avoidance of taxes through misrepresentation or similar means.

Investment dictionary. . 2012.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • Tax shelter — Tax shelters are any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments. The methodology can vary depending on local and international tax laws.In North… …   Wikipedia

  • tax shelter — n: an entity (as a partnership) or investment plan or arrangement whose principal purpose is the avoidance or evasion of income tax; also: an interest offered or purchased on the premise that it will provide favorable tax consequences purchased… …   Law dictionary

  • tax shelter — tax shelters N COUNT A tax shelter is a way of arranging the finances of a business or a person so that they have to pay less tax. The consultancy offers advice on ethical tax shelters …   English dictionary

  • tax shelter — tax shield Any financial arrangement made to lower a person s or a company s tax liabilities. See: abusive tax shelter …   Accounting dictionary

  • tax shelter — tax .shelter n a plan or method that allows you to legally avoid paying tax …   Dictionary of contemporary English

  • tax shelter — tax ,shelter noun count somewhere you can invest your money without having to pay tax on the profits …   Usage of the words and phrases in modern English

  • tax shelter — ☆ tax shelter n. any financial investment made in order to acquire expenses, depreciation allowances, etc. or to defer income, as in an IRA or Keogh plan, so as to reduce one s income tax …   English World dictionary

  • tax shelter — Legal methods taxpayers can use to reduce tax liabilities . An example is the use of depreciation of assets. Bloomberg Financial Dictionary * * * tax shelter ˈtax ˌshelter noun [countable] TAX ACCOUNTING a plan or arrangement that allows you to… …   Financial and business terms

  • tax shelter — noun a way of organizing business to reduce the taxes it must pay on current earnings • Syn: ↑shelter • Derivationally related forms: ↑shelter (for: ↑shelter) • Hypernyms: ↑decrease, ↑ …   Useful english dictionary

  • tax shelter — UK / US noun [countable] Word forms tax shelter : singular tax shelter plural tax shelters somewhere you can invest your money without having to pay tax on the profits …   English dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”