Question

If tax rates are decreasing, a general planning strategy to consider would be the following and...

  1. If tax rates are decreasing, a general planning strategy to consider would be the following and explain why:
  1. taxpayers should accelerate income
  2. taxpayers should defer deductions
  3. taxpayers should defer income
  4. taxpayers should defer deductions and accelerate income
  5. None of the choices are correct
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

If the tax rates are decreasing then the Company will pay lower taxes in the future. If the same is accrued now the Company will pay higher taxes and if at later date then the Company will pay lower taxes.

Hence as a general planning strategy the Company should defer income pay lower taxes in coming time.

Option (a) is incorrect since if the Company will accelerate then the Company might be ending by paying higher tax now. Forecast is lower tax rate ahead.

Option (b) Deferring deductions is not a viable option since Company will end paying higher taxes now.

Option (c) Income should deferred since the forecast is lower tax rates ahead. Tax savings will be their in this strategy. Thus option (c) is correct.

Option (d) No both can't be done as explained above.

Option (e) Not correct since Option (c) is right.

Thus the correct option will be (c). The Company should defer the income.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Tax question : Lucinda is contemplating a long-range planning strategy that will allow her to defer...
Tax question : Lucinda is contemplating a long-range planning strategy that will allow her to defer sizable portions of her income for 10 years. What type of planning strategy is she contemplating? What are some potential risks associated with this type of strategy?
The Bush tax cuts a. held constant tax rates for the upper brackets and decreased tax...
The Bush tax cuts a. held constant tax rates for the upper brackets and decreased tax rates for lower income taxpayers. b. reduced tax rates for the upper brackets and increased tax rates for lower income taxpayers. c. reduced tax rates for the upper brackets and held constant tax rates for lower income taxpayers. d. Increased tax rates for the upper brackets and decreased tax rates for lower income taxpayers. e. reduced tax rates for the upper brackets and decreased...
Compute the 2017 tax liability and the marginal and average tax rates for the following taxpayers....
Compute the 2017 tax liability and the marginal and average tax rates for the following taxpayers. Click here to access the 2017 tax rate schedule. If required, round the tax liability the nearest dollar. When required, round the average rates to three decimal places before converting to a percentage (i.e. .67073 would be rounded to .671 and entered as 67.1%). a. Chandler, who files as a single taxpayer, has taxable income of $118,600. Tax liability: $ Marginal rate: % Average...
1.All of the following are general sources of federal tax law except: Group of answer choices...
1.All of the following are general sources of federal tax law except: Group of answer choices b. Treasury Department regulations d. tax treaties a. Revenue procedures c. court decisions 2. The main reason taxpayers bring their case to the Tax Court is: Group of answer choices a. taxpayers can be awarded attorney costs if they win d. taxpayers do not have to pay their tax deficiency first b. taxpayers can file their petitions to the court as late as one...
use the 2016 marginal tax rates to compute the income tax owed by the following person...
use the 2016 marginal tax rates to compute the income tax owed by the following person single male, no dependents gross income:$94,000 adjustments:$2000 deductions:$34,000 mortgage interest $4271 property taxes $4000 charitable contributions tax none:none
The AMT can be traced to the end of the Lyndon Johnson presidency and the beginning...
The AMT can be traced to the end of the Lyndon Johnson presidency and the beginning of Richard Nixon’s in 1969. The theme of the AMT resonates to this day, though, as the tax is characterized as a way to ensure that all taxpayers pay fair share toward the operations of the Federal government. Is not the presence of an AMT itself an admission by Congress that it cannot design a tax law that accommodates the circumstances of all taxpayers?...
What would be the marginal and average tax rates for a corporation with an income level...
What would be the marginal and average tax rates for a corporation with an income level of $90,000? (Do not round intermediate calculations. Enter the marginal tax rate as a whole percent. Enter the average tax rate as a percent rounded to 2 decimal places.) Single Taxpayers    Tax rate % $0-$9,525 10 9526-38700    12 38701-82500 22 82501-157500    24 157501-200000 32 200001-500000 35 500001 and above    37
1. The U.S. income tax was enacted by the _____ amendment to the Constitution. a.16th b.18th...
1. The U.S. income tax was enacted by the _____ amendment to the Constitution. a.16th b.18th c.2nd d.13th 2. Tax law is a tool used by government to: a.Raise revenue to run government b.Support research and development c.Further economic goals d.Encourage social objectives e.All of these choices are correct. 3. Entities required to report income to the IRS are: a.Partnerships b.Estates c.Trusts d.Corporations e.All of these choices are correct. 4. What is reported on Schedule A of Form 1040? a.Itemized...
7. a. If the U.S. government raises the income tax rates, would this have any impact...
7. a. If the U.S. government raises the income tax rates, would this have any impact on a state government's bonds? Please explain your answer. b.If the expectations theory of the term structure is correct, would a reduction in the supply of thirty-year Treasury bonds affect their yields?
2. (a) If the U.S. government raises the income tax rates, would this have any impact...
2. (a) If the U.S. government raises the income tax rates, would this have any impact on a state government's bonds? Please explain your answer. (b) If the expectations theory of the term structure is correct, would a reduction in the supply of thirty-year Treasury bonds affect their yields?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT