tax avoidance

tax avoidance definition - finance
Legally lessening the amount of taxes that a person pays. Tax avoidance strategies include making charitable deductions, investing in tax-exempt municipal bonds, and making a variety of retirement-related investments such as contributions to Individual Retirement Accounts (within income limits), salary reduction plans, or 401(k) plans. Using illegal methods to avoid paying taxes is called tax evasion.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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