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

Question

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

Deferring recognition of income can help reduce current tax liabilities, and putting deductions into the year with the highest marginal tax rate can provide the greatest tax benefit. Both statements are therefore correct rules of thumb to follow when planning for taxes.

Tax Planning Involves the Timing of Income and Deductions