Prudent tax planning considers ways to
A) reduce your taxes by not recognizing some of your income.
B) reduce income by deferring recognition via 401k and IRA accounts.
C) maximize long-term capital gains.
D) Both B and C are correct.

Question

Quizplus · Accepted Answer

Prudent tax planning often involves strategies to reduce taxable income and maximize tax-efficient investments. Deferring income recognition through retirement accounts like 401(k)s and IRAs (B) and focusing on investments that yield long-term capital gains, which are typically taxed at a lower rate than ordinary income (C), are common strategies.

Prudent Tax Planning Considers Ways to