The only way we have discovered so far to legally pay no income tax in the eyes of the government is to reduce your income below the taxable level. For single persons under 65 with no other adjustments, this would be $10300 a year. However, there are ways to increase this amount, read on!

First of all, contribute to your Individual Retirement Account (IRA). Contributions to your IRA are not taxed until you retire and start drawing down your IRA account. For 2016, one can contribute up to $5500, or $6500 if you are age 50 or older before 2016. Caution! You cannot contribute more than your taxable earnings, so if you only made $3000 in 2016, your limit would be $3000. This brings our single person under 50 to $15,8000 a year before he has to pay any federal income tax. Of course, he won't have that money to spend, but the contribution will offset other income.

If you have any investments, such as stocks or corporate bonds, or even just an interest bearing bank account or Certificates of Deposit (CD) unload them (when they mature in the case of CDs) and switch to tax free municipal bonds. You'll have to pay capital gains on any investments you sell at a profit, but you can dump your losers and use that loss to offset any gains. Unless you have a lot of money, we advise not investing in individual municipal bonds, but to purchase shares in a municipal bond fund. While municipal bonds are probably safer than stocks, cities have gone bankrupt and mutual funds invest in many different bond issues minimizing the risk should one of the bonds go into default. The great thing from a war tax protester standpoint is that your investment goes to worthwhile projects such as a new school or public facilities, instead of corporate greed or weapons of mass destruction. Interest from municipal bonds is tax free, although capital gains should you or your fund sell are still taxable.

If you have rental property, you can make this break even by either reducing rents or by leaving one or more units vacant when someone moves out. I personally like the idea of reducing rents, you can help a war tax protester get by on minimal income by offering a low cost place to live. Remember to allow for repairs and maintainence, as these are deductible from the rental income.

Student Loan Interest Deduction: Unlike most deductible interest, qualified student loan interest is claimed as an adjustment to income.

Tuition and Fees Deduction: If you are still in school, you can deduct college tuition and other mandatory school fees, but it may be more advantageous to take the Hope and Lifetime Learning Credits instead. The calculations are too involved to present here, you will need to consult a qualified tax adviser or do more research on your own if this applies to you.

Health Savings Account Deduction: Health Savings Accounts (HSA) are tax deductible savings accounts that allow the taxpayer to save money tax free for future health expenses. HSAs are paired with high deductible health insurance plans. Earnings in the account are also tax exempt. Withdrawals from the account are also tax free if used to pay for qualified medical expenses. The contribution limits for 2016 are $3350 for individuals, $6750 for family coverage and $1000 additional "catch-up" contributions for people 55 and older. Caution! You cannot make contributions to an HSA if you are enrolled in Medicare Part A or Part B. Because of this restriction, it appears to us that HSAs are mostly of value to younger people.

More ways to reduce your taxable income: These don't apply to very many people, so we won't go into depth here, but if any of these apply to your situation, you should take the time to research them.

• Classroom Expenses: Teachers can deduct out of pocket expenses related to teaching.
• Performing Artists and similar professions can deduct certain expenses related to their work.
• Moving Expenses: Generally if you move more than 50 miles to take a new job or if you are reassigned to a new location by your employer.
• Self Employment Tax Deduction: The "employer half" of social security and Medicare taxes that self employed people must pay.
• Self Employment Medical Insurance
• SEP/SIMPLE/Keogh deduction: Similar to IRA but with higher limits

While you won't want to seek out the following adjustments, if you are unfortunate enough to have them you should take tax advantage of the situation:

• Alimony Paid: Any amounts paid under a divorce or separation agreement are deductible if all of the following conditions are met:
  1. You and your ex do not file a joint return with each other.
  2. You pay in cash (checks or money orders are considered cash here).
  3. The divorce or separation papers do not say that the payment is not alimony.
  4. You aren't members of the same household when you make the payment.
  5. You have no liability to make the payment after the death of your ex.
  6. Your payment is not considered child support.

• Bad Debt Deduction: If someone owes you money that you cannot collect. It must be clear that the money was a loan and not a gift. If you did loan someone a substantial amount of money we sure hope that you had the sense to write up a promissory note. You must establish that you have made reasonable steps to collect the debt and that the debt is worthless. You do not have to go to the expense of going to court if you can show that a judgment from a court would be uncollectable. You may take the deduction only in the year that the debt becomes worthless, however, with the exception of the creditor dying and the estate being declared insolvent there are ways around this "He says he'll have the money any time now".

  Early Withdrawal Penalty: If you withdrew money from a CD or similar account prior to maturity, you probably got hit with a penalty which was withheld directly from your proceeds.

Bottom Line: It is possible for a single person under 50 to shelter at least $12,000 of income from the federal income tax. Married people with children can shelter even more, but the cost of raising children will probably offset any gains.

Don't think it's possible to live on just $12,000 a year? Here is how one person is doing it, with suggestions for others.