Tax Planning Involves the Timing of Income and Deductions

question 136

Multiple Choice

Tax planning involves the timing of income and deductions. General rules of thumb to follow when planning include
I.putting income into the year with the lowest marginal tax rate.
II.deferring deductions.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

Government Policy

Strategies and measures adopted by a government to guide its actions in the pursuit of specific goals and objectives.

Consumer Surplus

The difference between what consumers are willing to pay for a good and what they actually pay, representing the benefit consumers receive from purchasing the good at a lower price.

Price Floor

A government- or group-imposed price control that sets the lowest price at which a product can be sold.

Price Support

Government interventions to maintain the price of a commodity or product at a certain level, often through purchasing excess supply or providing subsidies to producers.