The strategy is simple in concept and has long been a staple with high-income taxpayers: Shift your high tax bracket income to other family members who are in lower tax brackets. The family will then pay lower taxes on this shifted income. Here are a few income-shifting strategies to consider.

Transfer gains. If you own stock or mutual funds that you've held for more than one year and that have increased in value, consider giving them to your children for subsequent sale. If you claim the gains, they'll likely be taxed at a 20% rate. But it's likely that your children will be able to realize the gains at a tax rate of 5% or less. Beware of the kiddie tax if you're giving assets to children under age 14, but don't overlook this strategy if you have older kids.

Hire your children. If you have an unincorporated business, hiring your kids can save significant tax dollars. You'll not only avoid income taxes on your business income but also likely avoid the dreaded self-employment tax. And your kids can earn up to $5,000 in wage income, completely avoid the kiddie tax, and not pay a dime in income taxes. And, because they're working for you in an unincorporated business, they'll also not have to pay any payroll taxes on the wages you pay them. If your business is incorporated, you'll then be required to pay payroll taxes on the kids' wages, but the income tax savings are still substantial. Remember that if you do hire your kids, they must actually perform services, the wages paid must be reasonable, and the appropriate payroll forms must be completed.

Shift education credits. It's possible that you're unable to claim either the Hope or Lifetime Learning credits for your college-age children because your income exceeds the allowable limits. If that's the case and your kids have taxable income from work or investments, consider dropping them as dependents from your tax return. It's possible, depending on your income, that you're losing the benefit of your children's dependent exemptions anyway. If you elect not to claim them as dependents, they can then claim the education credits on their individual income tax returns, even if you paid the college bills.

Establish IRA accounts. With income from wages, your child can establish a $3,000 IRA account. If it's a traditional deductible IRA, your child can earn up to $8,000 in wages without paying any income taxes. This can provide an even larger benefit to you if you've hired them in your unincorporated business, saving tax dollars today. You could also consider a nondeductible Roth IRA. While not currently deductible, the contributions will grow substantially over the years, and distributions are completely tax free once the child reaches age 59 1/2, saving tax dollars tomorrow.

You'll note that in all of the strategies mentioned above, children are used as examples. But don't forget substituting other lower-income family members (such as parents) will also allow for the shifting of income and will provide similar tax benefits. Translating the concept of income shifting to actual tax savings can get complicated, but it's certainly worth the effort.

Roy Lewis lives in a trailer down by the river and is a motivational speaker when not dealing with tax issues, and he understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.