Final answer:
To decrease tax liability for the next year, an ideal strategy would be to increase depreciation expenses, accelerate revenue recognition, and delay expenses.
Step-by-step explanation:
One ideal strategy to decrease the tax liability for the next year is to increase depreciation expenses. Depreciation is the gradual decrease in the value of an asset over time. By increasing depreciation expenses, a company can deduct larger amounts from their taxable income, reducing their tax liability. For example, if a company purchases new equipment, they can choose to depreciate it over a shorter time period, which will result in higher depreciation expenses and lower taxable income.
Another strategy is to accelerate revenue recognition. Revenue recognition is the process of recording revenue in a company's financial statements. By recognizing revenue earlier, a company can increase their expenses and reduce their taxable income. For instance, a company can choose to include revenue from a sale in the current year rather than waiting until the following year.
Lastly, delaying expenses can also help decrease tax liability. By postponing the payment of certain expenses to the next year, a company can reduce their current year's taxable income. For example, a company can delay the payment of a large expense, such as rent or advertising, to the following year.