Question

What is the difference between tax evasion and tax avoidance? Think about a particular tax that you wish you didn't have to pay. What are some ways you could evade the tax? What are some ways you could avoid paying the tax?

Answer 1

Tax avoidance is the act of reducing, under the scope of the law or without breaching the law, tax liability. In other words, in conjunction with their financial transactions, taxpayers may use legal strategies to minimise the amount of tax payable. These ways to allow taxpayers to avoid paying taxes to the government can include the following: Usage of tax deductions to mitigate corporate costs and corporate tax bill Delaying the payment of tax until a later date for an effective tax deferral scheme Taking advantage of tax incentives for legal reasons such as business transactions, benefiting the company's employees for sick leave and family leave

Evasion of Tax is any unauthorised method or improper effort by taxpayers to limit tax liability. It is strongly related to tactics or fraudulent activities that result in less revenues being seen to reduce the tax burden of the individual or corporation.The above are commonly forms of tax evasion: Making misleading claims and data Inflating benefits without legal evidence Hiding related information to show the company profits actually received, such as sales reports or cash income reporting

I would want to avoid or evade sales tax,

Just buy less, or transfer to a state with a sales tax that is lower (or not). It's that.

Buying online doesn't actually help, because that's just half of your dilemma, even though you may stop paying any sales tax; the state can (and most do) also collect the tax directly from you rather than the vendor (it's referred to as a 'use tax'). Sure, much like any other tax you owe, you can always simply not pay it and pray you're not caught, but it doesn't always work out.