Question

When tax rates are constant, tax planning suggests that taxpayers should consider ____ the recognition of income.

A) Accelerating
B) Deferring
C) Eliminating
D) Ignoring

Answer 1

Tax planning suggests that when tax rates are constant, taxpayers should consider deferring the recognition of income to reduce their current tax liability.

Step-by-step explanation:

Tax planning suggests that when tax rates are constant, taxpayers should consider deferring the recognition of income. By deferring the recognition of income, taxpayers can delay paying taxes on that income until a future tax year. This strategy can help taxpayers reduce their current tax liability and potentially benefit from lower tax rates in future years.