Tax strategies are methods individuals and businesses use to minimize their tax liabilities while remaining compliant with the law. These strategies can include deductions, credits, and exemptions that reduce taxable income. For example, contributing to retirement accounts like a 401(k) can lower taxable income, while claiming tax credits for education expenses can directly reduce the amount owed. Another common tax strategy is tax-loss harvesting, where investors sell losing investments to offset gains from profitable ones. This approach can help reduce overall tax liability. Additionally, understanding the tax brackets and timing income and expenses can further optimize tax outcomes.