tax avoidance

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Tax avoidance

Minimizing tax burden through legal means such as tax-free municipal bonds, tax shelters, IRA accounts, and trusts. Compare with tax evasion.

Tax Avoidance

The act or practice of taking steps to legally reduce one's tax liability. One may do this directly by taking advantage of an applicable tax credit or tax deduction. More often, however, the term refers to a person or company making trades or conducting other activities specifically to avoid taxes. For example, one may sell a stock at a loss to offset a gain on the sale of another stock. It is important to note that tax avoidance is different from tax evasion, which is the minimization of one's tax liability through illegal means, though it is generally acknowledged that the line between the two can be murky.

tax avoidance

The reduction of a tax liability by legal means. For example, high-income individuals avoid significant federal income taxes by purchasing and holding municipal bonds. Compare tax evasion.

tax avoidance

any efforts by taxpayers to arrange their financial affairs so as to avoid paying TAX by taking maximum advantage of taxation allowances and reliefs. In this way taxpayers can legally minimize their tax burden. Compare TAX EVASION.

tax avoidance

any efforts by taxpayers to arrange their financial affairs so as to avoid paying TAX by taking maximum advantage of taxation allowances and reliefs. In this way taxpayers can legally minimize their tax burden. Compare TAX EVASION.

tax avoidance

Perfectly legal and ethical strategies for reducing taxes to the lowest possible number. Contrast with tax evasion.

References in periodicals archive ?
A powerful US Senate panel has accused Deutsche Bank AG (NYSE: AG) and Barclays Plc (LSE: BARC) of helping hedge funds avoid taxes, according to Reuters.
Those arraignments have allowed Romney's individual retirement account to avoid taxes on its investments, and may have also reduced his income taxes, according to a New York Times review of thousands of financial documents.
You may not be able to avoid taxes, but you can take steps to avoid the headaches that often accompany them.
Barclays Plc (LSE: BARC) is expected to announce soon the closure of its tax-planning unit, which has been accused of helping clients avoid taxes.
In addition, the innocent spouse's tax liability is increased by the value of any property received from the other spouse, if the principal purpose of the transfer was to avoid taxes.
The deal is structured to largely avoid taxes for the family trusts; the ability to depreciate the value of the real estate acquired will give the trusts some tax-deferred income, while the diversified portfolio of investments will reduce the family's concentration of assets.
According to Reuters, the head of Credit Suisse (NYSE: CS) has denied accusations that Swiss banks had been helping Germans avoid taxes in spite of a standing tax pact with Germany.
They, like Broad, can take advantage of a growing arsenal of Wall Street techniques to delay or entirely avoid taxes on their investment gains.
Although opportunities to permanently avoid taxes are limited, opportunities for deferring taxes are abundant.
American tax authorities are trying to force UBS AG to divulge details of clients who may have used the Swiss bank to avoid taxes in the US.
When I retire, I must roll over my 401(k) money to avoid taxes.