Which of the following is/are advantages of tax-deferred income benefits? I. Postponing tax payments allows interest to accrue on dollars owed to the government.
II. Deferral allows compound interest to also accumulate on a tax-deferred basis.

Question

Quizplus · Accepted Answer

Both I and II are advantages of tax-deferred income benefits. Postponing tax payments allows the money to remain invested, earning interest, which can be reinvested to earn more interest, allowing for compound interest to accumulate on a tax-deferred basis.

Which of the Following Is/are Advantages of Tax-Deferred Income Benefits