First let’s talk about tax mitigation strategies. Tax mitigation is simply the idea of developing investment strategies that reduce your taxes as well as potentially grow your wealth. The choices you make when assets are in motion have tax consequences, and how you manage those consequences can either cost or save you in taxes.
To better understand, let’s look at possible sources of income. There are four categories of income: earned income, investment income (which includes passive income and portfolio income), tax-deferred income, and my favorite—tax-free income. Each category offers different strategies and vehicles to reduce or defer taxes.
