Personal Finance 1st Edition by Jack R. Kapoor

Exercise 25

1 How does tax avoidance differ from tax evasion?

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2 What common tax-saving methods are available to most individuals and households?

Action Application Talk to several people about the benefits and drawbacks of receiving a federal tax refund each year.

Step 1 of 2

(1) Tax avoidance refers to the use of legitimate methods to reduce one’s taxes whereas Tax evasion is the use of illegal actions to reduce taxes.