60.1K

Verified Solution

Link Copied!

Marcy, age 30 and single, owns a successful medical practice that is organized as a sole proprietorship. The medical practice is a cash-basis taxpayer. In December of 2021, Marcy's practice owes a $20,000 business expense that can either be paid and deducted in either 2021 or 2022. In 2021, Marcy's marginal tax rate is 32%. However, Marcy expects that her marginal tax rate will change to 35% in 2022. The applicable interest rate for the time value of money is 5%. In which year should Marcy's business deduct the expense? By deducting the expense in [year], Marcy's tax savings are Note: Round your tax savings answer to the nearest dollar.

Marcy, age 30 and single, owns a successful medical practice that is organized as a sole proprietorship. The medical practice is a cash-basis taxpayer. In December of 2021, Marcy's practice owes a $20,000 business expense that can either be paid and deducted in either 2021 or 2022 . In 2021. Marcy's marginal tax rate is 32\%. However. Marcy expects that her marginal tax rate will change to 35% in 2022 . The applicable interest rate for the time value of money is 5%. In which year should Marcy's business deduct the expense? By deducting the expense in [year], Marcy's tax savings are Note: Round your tax savings answer to the nearest dollar

Answer & Explanation Solved by verified expert

See Answer