Welcome to Professor Savings.com
We teach finance basics
Hi, I’m you’re host today Rayfil Wong
What is tax evasion?
Let’s say Jane here wants to lower the amount of tax she has to pay the government
Don’t we all?
So she searches for strategies to achieve this goal this is called tax avoidance.
This includes tax credits and tax deductions.
One example is that Jane can max out her retirement plan 401 (k) contributionor have tax deductions
from donating to certain charities to have the lowest adjusted gross income possible.
Original liability minus deductions = lower tax liability
let’s go on a cruise
These are strategies are used by tax professionals such as accountants are perfectly legal.
Jumping to the dark path tax evasion is intentionally paying taxes owed such as not reporting accurate earnings
or not reporting the income from interest earned this is a no no and illegal
Wwo bad things can happen
One, jail time.
Two, fines on not reporting tax filings.
Professor Savings signing off.
Please subscribe to our channel if you want to learn more on finance basics, also, subscribe and like