Tax-avoidance meaning

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.
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The act of taking advantage of legal tax-planning opportunities and shelters in order to minimize one’s income tax liability. See also tax evasion, which is not legal.
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