What term describes methods used to reduce a business's tax liabilities?

The term that best describes methods used to reduce a business's tax liabilities is tax strategies. Tax strategies encompass a variety of legal techniques and financial planning approaches that businesses can implement to lower their taxable income or overall tax burden. This includes utilizing deductions, credits, deferrals, and other provisions within the tax code strategically.

Effective tax strategies are crucial for businesses seeking to optimize their financial performance and reinvest savings into growth opportunities. These strategies operate within the legal framework of tax laws and regulations, ensuring compliance while maximizing tax efficiency.

While tax avoidance can also refer to the legal act of minimizing taxes owed, it is often seen as a narrower concept compared to tax strategies, which encapsulates a broader range of practices. Tax evasion, on the other hand, involves illegally misrepresenting or concealing information to reduce tax liabilities and is not a legitimate method for tax reduction. Accounting practices, while related to how financial realities are presented, do not specifically focus on reducing tax liabilities. Thus, tax strategies represent the most comprehensive and correct term for the methods used to lower business tax liabilities.