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Categories: General Tax Terms

Tax Avoidance refers to the legal practice of minimizing tax liabilities through strategic planning and the use of tax laws and regulations.

Tax avoidance involves utilizing deductions, credits, exemptions, and loopholes in the tax code to reduce the amount of taxable income. For example, an individual might contribute to a retirement account to lower their taxable income, or a business may choose to operate in a jurisdiction with lower tax rates. Unlike tax evasion, which is illegal, tax avoidance is permissible and often considered a legitimate part of tax planning.

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