Financial Planner

Answer: D - Purchasing supplies, review of asset acquisitions, and early payment of state income or property taxes are all strategies for the acceleration of deductions. Purchasing supplies and inventory can be expensed for businesses. The review of asset acquisition ensures that assets are classified under the shortest period for depreciation. The early payment of state income or property taxes is usually due on the 15^th of the month after the tax year; however, if payments are made prior to the end of the tax year, a greater deduction can be taken. Acceleration of deductions is an effective strategy if the marginal tax rate for the client in future years will be the same or less. If the rate jumps, them it makes little sense to accelerate deductions.