expect to pay $14,000 tithing and $8,0 taxes for the next few years (these are their only itemized deductions). How much would bunching save them over the course of two years if their marginal tax rate is 22% ? (The standard deduction for a married filing jointly taxpayer is $24,000.)
expect to pay $14,000 tithing and $8,0 taxes for the next few years (these are their only itemized deductions). How much would bunching save them over the course of two years if their marginal tax rate is 22% ? (The standard deduction for a married filing jointly taxpayer is $24,000.)
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 44P
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Transcribed Image Text:The Roosevelt's are financially savvy and want to take advantage of the principle of bunching. Assume
for this problem, that the Roosevelts expect to pay $14,000 in tithing and $8,000 in state and local
taxes for the next few years (these are their only itemized deductions). How much would bunching
save them over the course of two years if their marginal tax rate is 22%? (The standard deduction for
a married filing jointly taxpayer is $24,000.)
$12,000
$4,840
$3,080
$3,542
$2,640
O None of the Above
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