Tax Avoidance

Strategy to pay the least amount of tax possible through legal means. For example, taxpayers may buy tax-free municipal bonds; shelter gains inside tax-deferred Ira, Keogh accounts, Salary Reduction Plans or tax free Roth Ira accounts; shift assets to children who need not pay taxes on part of their income; make legitimate charitable contributions to generate tax deductions; and establish trusts to avoid Estate Taxes. Illegal strategies to avoid paying taxes are called Tax Evasion.