- Tax Avoidance
- The use of legal methods to modify an individual's financial situation in order to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which is illegal.
Most taxpayers use some forms of tax avoidance. For example, individuals who contribute to employer-sponsored retirement plans with pre-tax funds are engaging in tax avoidance because the amount of taxes paid on the funds when they are withdrawn is usually less than the amount that the individual would owe today. Furthermore, retirement plans allow taxpayers to defer paying taxes until a much later date, which allows their savings to grow at a faster rate.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
tax avoidance — legally reducing tax liability. Tax planning is the activity by which a taxpayer seeks to arrange his affairs so that his tax liability is minimised; avoidance of tax within the limits of tax law is perfectly legitimate; tax evasion is the… … Law dictionary
tax avoidance — Minimizing tax burden through legal means such as tax free municipal bonds, tax shelters , IRA accounts, and trusts. Compare with tax evasion. Bloomberg Financial Dictionary An attempt to minimise the tax payable by legal means. Financial… … Financial and business terms
tax avoidance — noun the minimization of tax liability by lawful methods • Hypernyms: ↑minimization, ↑minimisation * * * ˈtax avoidance [tax avoidance] noun uncountable … Useful english dictionary
tax avoidance — The minimization of one s tax liability by taking advantage of legally available tax planning opportunities. Tax avoidance may be contrasted with tax evasion which entails the reduction of tax liability by using illegal means Compare tax evasion … Black's law dictionary
tax avoidance — N UNCOUNT Tax avoidance is the use of legal methods to pay the smallest possible amount of tax … English dictionary
tax avoidance — tax planning Minimizing tax liabilities legally and by means of full disclosure to the tax authorities. Compare tax evasion … Big dictionary of business and management
tax avoidance — tax a.voidance n [U] the practice of trying to pay less tax in legal ways →↑tax evasion … Dictionary of contemporary English
tax avoidance — tax a,voidance noun uncount the use of legal ways to pay less tax ─ compare TAX EVASION … Usage of the words and phrases in modern English
tax avoidance — Minimizing tax liabilities legally and by means of full disclosure to the tax authorities. See: tax planning Compare: tax evasion … Accounting dictionary
tax avoidance — noun The legal exploitation of the tax rules to minimize tax payments … Wiktionary