The timing strategy is particularly effective for cash-basis taxpayers.

Question

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Timing strategy involves deferring income or accelerating deductions in a way that optimizes tax savings. This can be particularly effective for cash-basis taxpayers, who recognize income when it is received and deduct expenses when they are paid. By timing the receipt of income and the payment of expenses, cash-basis taxpayers can lower their taxable income and reduce their tax liability.

The Timing Strategy Is Particularly Effective for Cash-Basis Taxpayers