This means the contributions can be deducted from your current - year taxes and that you do not pay any taxes on that money in the year you earn it. (aplusfcu.org)
If any of those profits are then distributed as dividends to the shareholders, those individuals must also pay a tax on the money when they file their personal tax returns. (inc.com)
Under scenario number two, we already paid taxes on the money before the investments were purchased, so we will be subject to the lower 15 % long term capital gains tax rate. (moneyahoy.com)