First off, do not confuse tax avoidance for tax evasion. Tax evasion is straight up lying about income, submitting false documents and is completely against the law. It is the reason the infamous Al Capone was sentenced to time at Alcatraz.
Tax avoidance is the completely legal method of lowering your tax bill and is a very common practice. Any time a tax payer submits a claim for permissible deductions and credits, that is tax avoidance. Claims like employee retirement savings, alimony paid and deductions for interest on certain loans. Or, or course, if you’re a business owner, you can claim expenses incurred in order for you business to operate. If you’re business does well, the economy doeswell.
There are occasions, if you move to a new job or are being relocated by your current employer to a new state, you may be able to claim moving expenses. These include the cost of a moving vehicle, highway tolls, gas and even the cost of a storage unit. The requirements for these claims involve some calculation of distance and time. The distance between your new job and your old home must be at least 50 miles farther than your old job to the same home. So if you were driving 10 miles from old home to old job each way, new job should be at least 60 miles from old home in order for you to qualify with distance.
You might be surprised to learn that tax avoidance is also an encouraged practice. How often have you heard the phrase “tax-deductible donation” on those charity radio or TV ads? In the U.S., the Internal Revenue Service use tax benefits as incentives for employers and individuals in attempts to direct the flow of money in the direction the country needs.
Examples of these are as follows. If you are an employee, your employer might offer a pre-tax public transportation benefit. This is to enourage people to use trains and buses more. The tax benefits or retirement savings accounts permitted for businesses and individuals is a way promoting self-sufficiency later in life. If you rent out property or have another form of capital gain, deductions are made on this to encourage investments. Home ownership can be claimed on your taxes as part of the governing body’s way to promoting just that, home ownership.
Obviously, you will not get full refunds on each claim you make but as they say, every little helps.