Questions: The goal of tax planning generally is to:

The goal of tax planning generally is to:
Transcript text: The goal of tax planning generally is to:
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Solution

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The answer is C: maximize after-tax wealth.

Explanation for each option:

A. Minimize taxes: While minimizing taxes is a component of tax planning, the ultimate goal is not just to pay the least amount of taxes possible. Instead, it is about managing taxes in a way that aligns with broader financial goals.

B. Minimize IRS scrutiny: While avoiding unnecessary IRS scrutiny is a consideration in tax planning, it is not the primary goal. Proper tax planning involves compliance with tax laws, which naturally reduces the risk of scrutiny.

C. Maximize after-tax wealth: This is the correct answer. The primary goal of tax planning is to maximize an individual's or a business's wealth after taxes. This involves strategically planning financial activities to reduce tax liability while ensuring compliance with tax laws.

D. Support the federal government: While paying taxes does support the government, this is not the goal of tax planning. Tax planning focuses on the taxpayer's financial benefit.

E. None of the choices are correct: This option is incorrect because option C accurately describes the goal of tax planning.

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