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Business, 25.02.2020 02:56 contactjoankenny

Trang is in the 12% marginal tax bracket in the current year. She owes a $10,000 bill for business expenses. Since she reports taxable income on a cash basis, she can deduct the $10,000 either this year or the next year, depending on when she makes the payment. She can pay the bill at any time before January 31 of the next year, without incurring the normal 12% interest charge. She expects to be in the 22% marginal bracket next year. Without considering the time value of money, what are her tax savings if she pays the bill after January 1?

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