Assume a taxpayer determines that his total income tax for the year is $25,000 at the time he files his tax return.Given the fixed tax liability,a taxpayer with savings should prefer a tax refund of $2,500 over a tax due of $2,500.

Question

Quizplus · Accepted Answer

A taxpayer with savings should prefer a tax due of $2,500 because it means they had the use of their money throughout the year, rather than giving an interest-free loan to the government by overpaying taxes and receiving a refund.

Assume a Taxpayer Determines That His Total Income Tax for the Year