Definition of Tax-Advantage

Any type of investment, account or plan that is either exempt from taxation or other type of tax benefits is a tax advantage. For instance partnerships, municipal bonds, annuities, and qualified plans are tax advantaged investments/plans.

Explanation of Tax-Advantage

Let’s take an example of an organization XYZ, which had to collect $ 50,000 from a customer. The customer canceled the order and never paid the money therefore, organization XYZ wrote off $50,000. This revenue/receivables is tax exempt hence, XYZ amount of tax will be lowered.