What is tax shelter? How to use in English

Discover the meaning of tax shelter in English, its pronunciation, and how to use it correctly in real-life situations. See examples and easy memorization tips.

Definition & pronunciation of tax shelter

tax shelternoun
nơi trú ẩn thuế
/ˈtæks ʃeltə(r)//ˈtæks ʃeltər/

Where does the word tax shelter come from?

The term "tax shelter" originated in the 1960s as a way to describe strategies used to legally reduce tax liability. The term itself became popular during this time because some of these strategies involved "sheltering" income from taxes through various financial mechanisms such as deductions, exemptions, and deferrals. These strategies, often complex and specialized, were primarily used by wealthy individuals and corporations to minimize their tax burden. While the term "tax shelter" has since fallen out of favor due to its negative connotation, the underlying strategies remain a legitimate part of many taxpayers' financial planning strategies.

Example of vocabulary tax shelternamespace

The wealthy business mogul utilized various tax shelters to significantly reduce his annual tax liability.
The savvy investor implemented a complex tax shelter strategy which allowed her to defer her capital gains taxes.
The real estate developer successfully took advantage of a tax shelter aimed at stimulating investment in urban areas, resulting in significant tax savings.
The small business owner consulted with a tax expert to discover lesser-known tax shelters that could help him minimize his tax burden.
The startup company's tax lawyer advised them on the eligibility of multiple R&D tax shelters, which significantly lowered their tax liabilities.