 As long as the individual makes withdrawals when he or she is in a lower tax bracket (that is, has a lower marginal tax rate), total taxes payable will be lower.On the other hand, some people (primarily business owners) may choose to do the "opposite" of deferring their tax liabilities by "prepaying" personal income tax that would otherwise be payable in future years.For example, if it is known that tax rates will be increasing in a future tax year, a business owner can reduce his total tax liability by paying himself/herself a higher salary and/or bonuses in the current tax year, even if he or she has to loan the business money to do so.