Tax Avoidance

One of the tenets of American capitalism is self-determination, of being able to make the choices that affect your business. And because of the way the US tax code is structured, businesses are encouraged to take advantage of the legal loopholes in order to save themselves from paying taxes. This is called tax avoidance, and is perfectly legal. The inverse of this – saving money on taxes through illegal means – is called tax evasion. Naturally, you'll want to avoid this unless you want to go to a federal prison for awhile.

Tax avoidance, though, is encouraged by the government and is a good way to save your company a good deal of money. There are several ways to go about this, although the United States has a unique tax rule that many other countries don't have, which requires American citizens to pay taxes on income generated worldwide, not just on income generated in the United States.

One of the most common ways of avoiding taxes is by forming a separate legal entity. This is a fairly common method, with many companies actually having several spin-off organizations for tax purposes. Additionally, personal taxes can be avoided if you donate all of your money to your company, which means that all the money you make is technically being made by a company.

Keep in mind that the legal issues surrounding taxes are quite complex and you should consult with an experienced business attorney before taking any tax avoidance action.

Contact Us

If you're a business owner looking to save money on taxes, you can benefit from legal help. contact the Austin business lawyers of Slater Kennon & Jameson, LLP, by calling 512-472-2431 today.