How Sanders Limited Can Maximize Tax Savings

What is the key to maximizing tax savings for Sanders Limited?

A. Increasing the original cost of assets

B. Decreasing the accumulated depreciation for tax purposes

Answer:

The key to maximizing tax savings for Sanders Limited is option B: Decreasing the accumulated depreciation for tax purposes.

Sanders Limited can significantly increase its tax savings by strategically managing its accumulated depreciation for tax purposes. By reducing the amount of accumulated depreciation, the company can lower its taxable income and consequently pay less in taxes.

One way Sanders Limited can achieve this is by ensuring that its assets are utilized efficiently and maintained properly to reduce the need for frequent depreciation. Additionally, the company can explore tax planning strategies that allow for accelerated depreciation or bonus depreciation to further lower its tax liability.

By proactively managing its accumulated depreciation and exploring various tax-saving strategies, Sanders Limited can optimize its tax savings and improve its overall financial performance.