Tax avoidance vs

Tax evasion

Tax avoidance

is the legal utilization of the tax law to one's own advantage to reduce the amount of tax that is payable by

means that are within the law Hiring a Tax Accountant is a strategy that many

people use to reduce the expense of personal income taxes and business income taxes

Tax Evasion

is the general term for efforts to not pay taxes by illegal means.

dishonest tax reporting declaring less income,

profits or gains than actually earned

or overstating deductions Investigated and

prosecuted by the IRS guilty party subject to

fines and/or imprisonment

He received the maximum three year

sentence after refusing to pay millions in taxes. Now he has to pay fines, legal

fees and spend time behind bars

Federal Withholdings each Pay-Period

Gov’t requires working individual to declare their withholding allowances on their W-4 form – fill this out on first day of work Goal is to avoid tax evasion and tax avoidance,

so the federal tax is taken out each pay-period according to:

Gross Income Amount Marital Status Number of Dependents

Tax Day: April 15th Tax returns are due to the government declaring all income earned the year beforeGov’t calculates all income and taxes paid

throughout the year and…. Any tax amount that the individual over-paid

during the year is “given back” to them after the submit their tax return

Any tax amount that the individual under-paid duping the year is “billed” to them after the submit their tax return

Withholdings –

The more allowances you take out each pay-period, the more $$ you will get back once you file your taxes on April 15th

a big tax return from the go's If you take out the least amount of allowances

each pay-period, the less $$ you will get back once you file your taxes on April 15th

Likely you could even owe the gov’t tax $$

VIDEOS

Wesley Snipes: http://www.msnbc.msn.com/id/21134540/vp/

16109103#16109103

Aaron Carter: http://www.msnbc.msn.com/id/21134540/vp/

16109103#34015448

Tax Evasion: http://www.youtube.com/watch?v=rLpUxiJblNI