DEFINITION of 'Tax-Advantaged'

Any type of investment, account or plan that is either exempt from taxation, tax-deferred or offers other types of tax benefits. Examples of Tax-Advantaged investments are municipal bonds, partnerships, UITs and annuities. Tax-advantaged plans include IRAs and qualified plans.

BREAKING DOWN 'Tax-Advantaged'

Tax-advantaged investments and accounts are used by a wide variety of investors and employees in various financial situations. High-income taxpayers seek tax-free municipal bond income, while employees save for retirement with IRAs and employer-sponsored retirement plans. Selecting the proper type of tax-advantaged accounts or investments depends on an investor's financial situation.

  1. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  2. Municipal Bond

    A municipal bond is a debt security issued by a state, municipality ...
  3. Qualifying Annuity

    This type of annuity is similar to any other, except that it ...
  4. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
  5. Tax-Deferred Savings Plan

    A savings plan or account that is registered with the government ...
  6. Qualified Annuity

    A qualified annuity is a financial product that accepts and grows ...
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