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Tax Avoidance

Tax avoidance includes legal methods which allow the tax payer to have lower income tax deductions and credits which are permissible within the provisions stated by the law. Tax avoidance should not be mistaken to tax evasion as the latter is illegal and punishable by law. One of the most common tax avoidance methods used is contributing to a retirement plan set up by your employer. Through your retirement plan, you can withdraw your benefits with higher tax concessions compared to a regular bank withdrawal. If you are a small business owner, one tax avoidance method is using the pass-through entity only where you make a tax deduction claim on Schedule C. This means that under Schedule C, you are filing your income tax return not as a business entity, but as an individual.  Consulting an expert is advisable in order to know more how to legally modify your financial situation for a lower tax deduction.