Real Is Thinking About Asking His Employer to Defer a $5000

question 59

Multiple Choice

Real is thinking about asking his employer to defer a $5000 bonus to next year's income because he will have to pay $2050 in tax if he receives it this year. What should he consider before asking his employer to do so?

• A)His marginal tax rate now and next year and the opportunity cost of waiting.
• B)He should take the bonus now because deferring it would be tax evasion.
• C)If his marginable tax rate this year is 45 percent, he should defer it to next year.
• D)If his marginal tax rate next year will be 40 percent, he should defer it to next year.

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Definitions:

Young Children

Refers to individuals in the early stages of life, typically considered to be between infancy and the early school years.

Older Children

Refers to children typically in the later stages of childhood, approaching adolescence, often characterized by more advanced cognitive and social development compared to younger children.

Common

Referring to something that occurs frequently or is widely accepted or shared.

Right- and Left-Handedness

The preference most people show for using one hand over the other, often evident in tasks such as writing.