With the development of high education reform, universities increasing enrollment and social environment changing, there is more tax-related financial business economy for universities. However, due to the influence of recognization that the universities are free of tax, there ocurrs many problems in tax-related economic business management, such as the lack of tax awareness, misunderstanding of tax policy, and lack of communication with the tax authorities, so it is urgent to resolve it. According to state and local tax preferential policies, this paper analyzes the actual type of income of colleges and universities，and proposes tax optimization method for different income types. Also, it offers some type of income tax optimization advice and suggestions for universities. For example, it should employ full-time staff engaging in tax optimization, take full advantage of tax preferential policies for national education to response for taxable and tax-free business related to different types of income, and timely report for tax or tax-free, which is in line with the law.