Question:What are some methods tax planners use to lower AGI or business
income? Describe what the...
Question
What are some methods tax planners use to lower AGI or business
income? Describe what the...
What are some methods tax planners use to lower AGI or business
income? Describe what the tax planner might decide for an
individual taxpayer, partnership, or corporation.
Tax planning is the planning of a financial situation or plan
to lower AGI or business income.
If an investment is sold at a loss, it can be used to offset
other income.
Increasing retirement contributions is a method to lower AGI or
business income.
Deductions for AGI provide the
greatest benefit for the tax payer
because it allows them to submit a lower AGI which could then allow
for more deductions. For example student loan
interest is a deduction for AGI.
Tax planning strategies for individual taxpayer include saving
for retirement in an IRA and other retirement contributions.
In a partnership, partners are taxed on their share of income
from partnership, hence the same tax planning applies to the
partners as the individuals.
One of the most used methods in corporation is by including the
deductions on business transport, health insurance of employees,
etc.