There are several basic strategies and most plans involve one or a combination of them.

• Splitting income among family members or legal entities in order to get more of the income taxed at a lower rate.
• Shifting income from one year to another in order to have it fall where it will be taxed at a lower rate.
• Shifting deductions from one year to another to place them where the tax benefit will be greater.
• Deferring tax liability through certain investment choices and through pension plan contributions.
• Structuring your business affairs to obtain a tax deduction for things that you enjoy such as a new vehicle or computer.
• Investing your money to produce income that is exempt from either federal or state income tax or both.