You Want to Minimize Your Current Tax Bill by Maximizing

question 18

Multiple Choice

You want to minimize your current tax bill by maximizing your contributions to your _____________.

• A) taxable bond portfolio
• B) Roth IRA
• C) 401k or 403b plan
• D) taxable savings account

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Definitions:

Fixed Expenses

Expenses that remain constant regardless of any variations in the amount of goods produced or the volume of sales, like lease payments, wages, and insurance fees.

Break-even Point

The point at which total costs equal total revenue, meaning no profit or loss is made.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been deducted.

Fixed Expenses

Costs that do not change with the level of output or sales in the short term, such as rent or salaries.