What is a Tax Deferral?
An individual is entitled to defer collection of a tax, abate a suit to collect a delinquent tax, or abate a sale to foreclose a tax lien if the individual is 65 years of age or older or is disabled as defined by section 11.13(m); and the tax was imposed against property that the individual owns and occupies as a residence homestead.
Tax deferrals are situations in which the collection of taxes on generated revenue is delayed for a specified period of time. The main function of the tax deferral is to create a situation where individuals and business entities do not experience undue hardship on income that is not being actively used at the time, and will not actually be made available for use until a later date. Essentially, a tax deferral ensures that no taxes are considered due until the funds in question are withdrawn by the taxpayer. The right of tax deferral is found in the taxation systems of many countries around the world. Generally, the deferral is related to income earned through employment or investment. The individual or business entity chooses to forego receiving the earnings for a period of time. In exchange, the government agrees to not assess taxes on those earnings until the entity or individual actually takes possession of the earnings. The concept of tax deferral is often involved with government
