Discussion Question Week 11: Learning Experience and Application of Knowledge

Discussion Question Week 11
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Discussion Question Week 11
Response to question 1
Assuming I have the power to make reforms to how tax research and planning is being conducted currently, the reform I would make entails requiring that tax planning to always include the following strategies: strategy to deduct, strategy to defer, and strategy to divide. A deduction strategy is essentially a claim to lower one’s taxable income. In essence, a deduction would lower one’s tax bill by an equivalent amount to his/her marginal rate. A deferral strategy will entail trying to push having to pay tax now into years in future. Paying a dollar of tax tomorrow is generally better than doing it today. The dividing strategy will entail splitting income. One will have the capability of taking income and then spread it amongst various taxpayers. For instance, it is better for two persons such as a wife and husb...