Reginald is thinking about asking his employer to defer a $5000 bonus to next year's income because he would have to pay $2050 in tax if he received it this year.What should he do?
A)If his marginal tax rate next year will be less than 35 percent he should consider deferring it.
B)He should take the bonus now because of the opportunity cost.
C)If his marginal tax rate next year will be less than 45 percent,he should defer it to next year.
D)If his marginal tax rate next year will be less than 41 percent,he should defer it to next year.

Question

Quizplus · Accepted Answer

If his marginal tax rate next year will be less than 35 percent, he will pay less than $1750 in taxes on the $5000 bonus, which is less than the $2050 he would pay this year.

Reginald Is Thinking About Asking His Employer to Defer a $5000