TAX BENEFITS
- Tax-Exempt:
The distribution of interest income, investment or earnings free of federal and state income tax. Example: Municipal bonds, tax-free bond funds and qualified withdrawals from Roth IRAs.
- Tax-Deferred:
The growth of an investment with no current income tax liability, which is payable when distributions are withdrawn from the investment. Example: Cash value of life insurance or annuities, Traditional IRAs and 401(k)s.
- Tax Deductions:
Deductions from earned income for investment-related expenses, such as depreciation, property taxes, and loan interest. Example: Investment real estate or direct participation programs.
