If tax rates are decreasing:
A) taxpayers should accelerate income.
B) taxpayers should defer deductions.
C) taxpayers should defer income.
D) taxpayers should defer deductions and accelerate income.
E) none of these.

Question

Quizplus · Accepted Answer

If tax rates are decreasing, it means that taxpayers will owe less taxes in the future. Therefore, taxpayers should defer income to future years when they will be subject to lower tax rates. Accelerating income or deferring deductions will result in paying taxes at higher rates, which would be counterproductive.

If Tax Rates Are Decreasing