Trang Is in the 15% Marginal Tax Bracket in the Current

question 55

Multiple Choice

Trang is in the 15% marginal tax bracket in the current year.She owes a $10,000 bill for business expenses.Since she reports taxable income on a cash basis,she can deduct the $10,000 in either this year or next year,depending on when she makes the payment.She can pay the bill at any time before January 31 of next year,without incurring the normal 12% interest charge.She expects to be in the 25% marginal bracket next year.Without considering the time value of money,what are her tax savings if she pays the bill after January 1?

• A)Current year $1,000.
• B)Current year $1,500.
• C)Next year $1,000.
• D)Next year $2,500.
• E)Next year $1,500.

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Definitions:

Common Iliac Artery

A large artery that bifurcates from the abdominal aorta and supplies blood to the pelvic region and lower limbs.

Internal Iliac Arteries

Branches of the common iliac arteries that supply blood to the pelvic organs, gluteal region, and perineum.

External Iliac Arteries

Major arteries located in the pelvic region, supplying blood to the lower limbs; each extends from the common iliac artery to become the femoral artery in the thigh.

Pulmonary Trunk

A major vessel that emerges from the right ventricle of the heart and bifurcates into the right and left pulmonary arteries, which carry blood to the lungs.