Six Crazy Simple Tax Planning Techniques: A Countdown

There are no great secrets where tax planning and tax cutting are concerned. Then again, most people do not even employ the basic tax strategies that they should. Especially the all-too busy entrepreneurs out there. The principles around which all tax-cutting strategies revolve can be reduced to six crazy simple basics. Here is a countdown of the top six:

6. Income splitting. Taxes are reduced for the total family unit by shifting income among several family members or legal entities in order to get more of the income taxed at lower rates.

5. Shifting income. Certain kinds of income (bonuses, dividends, and year-end payments, for example) can be shifted from one year to another in order to have the income fall where it will be taxed at lower rates.

4. Shifting deductions. As with income, certain deductible expenses can be paid in one year or the next in order to place them where the tax benefit will be greater.

3. Deferring tax. Putting your money into certain investments or making pension plan contributions allows you to defer the tax on some income until some future year.

2. Tax-deductible expenditures. Certain expenses may be tax deductible if you meet…