 Yeah, and that means I really only pay taxes on $100,000 minus $8,000 that I put in my IRA, so $91,000 is what I'm taxed. What do you mean when you say deferred? What does that mean? Well, it's simply a way of saying that the income that you get isn't taxed until you actually start taking it. The gains aren't taxed until you start taking income from those accounts.