Tax shelters are a form of deferring income. One of the best tax shelters for college is an oil and gas investment. As a general rule, the tax write-off on an oil and gas investment will not exceed 100% of the amount of your investment. Working interests in oil and gas ventures are generally not treated as passive activities.
A taxpayer reduced their taxable income by $5,000 by using tax shelters to defer income. Since the taxpayers income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,500 ($5,000 x 30%).
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by using tax shelters to defer income.