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Tax deferral doesn't help you if you pay at the same rate at repatriation. Multiplication commutes, paying either before or after compounding doesn't matter. It
by ThrustVectoring 9y ago
Tax deferral doesn't help you if you pay at the same rate at repatriation. Multiplication commutes, paying either before or after compounding doesn't matter. It could help for, like, maintaining ACA subsidy eligibility.
- jmalicki 9y agoYes, it does: Imagine 39% tax, where you compound at 10%. If you pay tax once per year, that becomes 6.1% after tax. 1.061^5 - 1= 0.34455 Now imagine you compound for 5 years at 10%, then repatriate and pay 39% on your profits: (1.1^5-1)*.61 = 0.37241 You have 10% more if you defer taxes.