Connie thinks that her salary and tax rate for next year will be lower than for this year. What step should she take to minimize her taxes in the current year?

Question

Quizplus · Accepted Answer

If Connie expects a lower tax rate for next year, she should accelerate deductions into the current year to reduce the amount of taxable income. This could include making charitable donations, prepaying property taxes, or accelerating planned business expenses. This will lower her taxable income for the current year and therefore reduce her taxes. Option A of accelerating receipt of income is not a good option as it will increase her taxable income and thus, increase her taxes. Delaying deductions (Option B) will not reduce her taxes in the current year, which is the objective of the question. Tax evasion (Option C) is illegal and not a valid option. Option E is not correct as accelerating deductions is a valid strategy to minimize taxes in the current year.

Connie Thinks That Her Salary and Tax Rate for Next