In the first and second parts of this series, Time to Find Tax Breaks . . . (Part I) and Time to Find Tax Breaks . . . (Part II), I discussed using a business entity to achieve tax breaks, then we looked at tax breaks available to employees through their benefits.  Now, here are some tax free savings and investment vehicles, as well as tax deferred or tax free accounts:

Government Securities
Treasury bills
Treasury notes
Treasury bonds

These instruments are fully taxable for federal tax purposes, but are tax-free from state and local taxes.  The higher your home state or town taxes, the more valauble these investments are to you.

Municipal Securities
State municipalities
Local municipalities

Free from federal taxes and if you live in the area from which the bond is issued, they are free from state and local taxes as well (sometimes called triple tax frees).  Again, the higher your tax bracket, the more valauable these investments are to you.

Savings Bonds
Interest is subject to federal tax, but not to state and local taxes.  Interest on some savings bonds may be tax free if you use them to pay qualified education expenses, but there are conditions.

Permanent Life Insurance
Death benefit is paid to beneficiaries tax free and cash value can be accessed tax free as well.  See my post, Buy Term Life Insurance and Invest the Difference? 

IRAs and 529 Plans
Traditional IRA
Roth IRA (Funded with after tax dollars, but tax free at withdrawal)
529 Plan (Must be used for education)

These plans can reduce your taxable income (Roth is after tax), but have restrictions on how much can go in (IRA's are $5000 in 2008 with a $1000 catch-up if you are over age 50), how much can be deducted (Roth eligiablity phases out for 2008 Married Filing Jointly at $159,000 to $169,000 and Traditional deductibility phases out for 2008 Married Filing Jointly at $85,000 to $105,000), and when money can come out.  Finally, you may not be eligable if you make too much money.

This discussion is overly simplified, and each item could be a post in and of itself.  Therefore, I recommend more research and/or consultation before you dive in. 

In Part IV of this series, I will discuss general tax deductions . . .