Tax planning is the analysis of a financial situation or plan from a tax perspective, with the goal of achieving the most advantageous tax outcome. It involves analyzing current and proposed tax laws to determine how to structure transactions in order to minimize taxes legally. Tax planning strategies may include deferring income, accelerating deductions, taking advantage of available credits and deductions, and using different types of accounts or investments. It can also involve setting up trusts or other entities to manage assets in order to reduce taxes.
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