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Basics Beginner: The Basics of Tax Planning

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1.
Which of the following statements is true?
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Both the above are true. Postponing income and accelerating deductions are both good tax strategies.
2.
A _______ is one kind of contribution that can help save you money on your taxes.
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Flexible spending account. A flexible spending account is one kind of contribution you can make that can help save you money on your taxes.
3.
Tax considerations will be the paramount factor in any smart business person's or investor's financial decision-making process.
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False. Tax considerations are important, of course, but should not drive the decision-making process.
4.
You can lawfully hire your child to work for you or your company, and his or her earnings will be taxed at the child's rate, not yours.
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True. Your child's tax rate on earned income for work done is likely to be lower than yours.
5.
Tax-deductible education expenses include only amounts paid for tuition and fees at an accredited college or university.
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False. Tuition at an accredited vocational school is also a qualified education expense.