Tax planning involves the timing of income and deductions. General rules of thumb to follow when planning include
I.putting income into the year with the lowest marginal tax rate.
II.deferring recognition of income.

Question

Tax planning involves the timing of income and deductions. General rules of thumb to follow when planning include
I.putting income into the year with the lowest marginal tax rate.
II.deferring recognition of income.
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Quizplus · Accepted Answer

Both statements are correct. By putting income into the year with the lowest marginal tax rate and deferring recognition of income, taxpayers can potentially minimize their tax liability. Timing income and deductions can help individuals take advantage of changes in tax laws and regulations, as well as fluctuations in their own income and expenses. However, it's important to note that tax planning should not be the only factor considered in financial decision-making, and seeking the guidance of a professional tax advisor is recommended.

Tax Planning Involves the Timing of Income and Deductions