1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

General Accounting Question

During May, Schultz Company produced 12,000 units of a product called Premium. Premium has a standard materials cost of three pieces per unit at $6 per piece. The actual materials used consisted of 35,000 pieces at a cost of $175,000. Actual purchases of the materials amounted to 45,000 pieces at a cost of $225,000. Compute the two materials variances.

Naveena Smith is a single individual. She claims a standard deduction of $12,000. Her salary for the year was $134,750. What is her taxable income?

Answer 2

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 3, Problem 1DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 8

Expert Solution & Answer

To determine

Explain the reason for the given statement is not true.

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Explain the reason for the given statement is not true.

Answer 12

Explanation of Solution

Tax Planning: It is the examining of a financial position or plan from the tax viewpoint. Tax planning makes sure of tax efficiency by reducing the tax liability and increasing the capability to make contribution for retirement plans that are vital for success.

The statement is wrong, because, the goal of tax planning is to maximize tax, not to minimize taxes. In general terms, the goal of tax planning is to maximize the taxpayers’ after tax wealth, while concurrently achieving the taxpayer’s non-tax goals.

Specially, maximizing after tax wealth requires one to consider both the tax and non-tax costs and benefits of other transactions, while tax minimization emphases only on a single tax.

Answer 13

Ch. 3 - 1. The goal of tax planning is to minimize taxes....Ch. 3 - Prob. 2DQ Ch. 3 - In this chapter we discussed three basic tax...Ch. 3 - What are the two basic timing strategies? What is...Ch. 3 - Prob. 5DQ Ch. 3 - What are some common examples of the timing...Ch. 3 - What factors increase the benefits of accelerating...Ch. 3 - How do changing tax rates affect the timing...Ch. 3 - Prob. 9DQ Ch. 3 - Prob. 10DQ

1. “The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Videos

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions

Additional Business Textbook Solutions