Tax strategy refers to a plan or approach used to manage an individual or entity’s tax liability. A tax strategy typically involves analyzing various financial and tax-related factors to identify opportunities to minimize tax liability and maximize after-tax income.

For example, a tax strategy may involve utilizing tax-advantaged retirement accounts, such as IRAs or 401(k)s, to reduce taxable income and save for retirement.

Other tax strategies may include making charitable donations, timing capital gains and losses to optimize tax rates, and utilizing various tax credits and deductions.

Tax strategies can be complex and require careful analysis of an individual or entity’s specific financial situation and tax circumstances. Tax professionals can provide guidance on developing and implementing tax strategies that are tailored to an individual or entity’s unique needs and goals.