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Business, 13.02.2020 20:15 ednalovegod

Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 40% this year and next year, and that she can earn an after-tax rate of return of 12% on her investments. When should she pay the $20,000 bill - this year or next?

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Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In...
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