Which of the following is NOT a legal method to reduce federal income taxes?

Claiming only 75% of your cash tips and wages as income does not align with federal tax laws, which require individuals to report all income earned. The Internal Revenue Service (IRS) mandates that all income, including tips, must be reported fully, ensuring transparency and accuracy in tax filings. Underreporting income is considered tax evasion, which is illegal and can lead to significant penalties.

On the other hand, claiming mortgage interest as a deduction is a legal method recognized by the IRS that can help reduce taxable income for homeowners. Similarly, contributing to a retirement account, like a 401(k) or IRA, is encouraged as it provides tax advantages, deferring taxes until withdrawal in retirement. Utilizing charitable contributions is also a legal method of reducing federal income taxes, as donations to qualified charities can be deducted from taxable income, promoting philanthropic efforts while providing tax relief to the donor.