Problem 3-43 (LO. 9) Each year, Tom and Cindy Bates (married filing jointly) normally have itemized deductions of $22,000 (which includes an annual $4,000 pledge payment to their church). On the advice of a friend, they do the following: In early January 2020, they pay their pledge for 2019; during 2020, they pay their pledge for 2020; and in late December 2020, they prepay their pledge for 2021. a. What are the Bateses trying to accomplish? To have their itemized deductions exceed the standard deduction Feedback V Check My Work In most cases, the choice between using the standard deduction and itemizing deductions from AGI is a sinple matter-pick whichever yields the larger tax benefit. However, taxes might be saved by alternating between the two options by tax planning. b. What would the Bates' total itemized deductions be if all three church pledge payments were made in 2020? Assume that the itemized deductions of $22,000 already included one year of the church pledge payments. What will be the Bates' tax saving if their marginal tax bracket is 24% for all three years? (Assume that the standard deduction amounts for 2020 and 2021 are the same.) By concentrating their charitable contributions, their tax savings becomes $
Problem 3-43 (LO. 9) Each year, Tom and Cindy Bates (married filing jointly) normally have itemized deductions of $22,000 (which includes an annual $4,000 pledge payment to their church). On the advice of a friend, they do the following: In early January 2020, they pay their pledge for 2019; during 2020, they pay their pledge for 2020; and in late December 2020, they prepay their pledge for 2021. a. What are the Bateses trying to accomplish? To have their itemized deductions exceed the standard deduction Feedback V Check My Work In most cases, the choice between using the standard deduction and itemizing deductions from AGI is a sinple matter-pick whichever yields the larger tax benefit. However, taxes might be saved by alternating between the two options by tax planning. b. What would the Bates' total itemized deductions be if all three church pledge payments were made in 2020? Assume that the itemized deductions of $22,000 already included one year of the church pledge payments. What will be the Bates' tax saving if their marginal tax bracket is 24% for all three years? (Assume that the standard deduction amounts for 2020 and 2021 are the same.) By concentrating their charitable contributions, their tax savings becomes $
Chapter3: Computing The Tax
Section: Chapter Questions
Problem 25P
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Problem 3-43 (LO. 9)
Each year, Tom and Cindy Bates (married filing jointly) normally have itemized deductions of $22,000 (which includes an annual $4,000
pledge payment to their church). On the advice of a friend, they do the following: In early January 2020, they pay their pledge for 2019;
during 2020, they pay their pledge for 2020; and in late December 2020, they prepay their pledge for 2021.
a. What are the Bateses trying to accomplish?
To have their itemized deductions exceed the standard deduction
Feedback
V Check My Work
In most cases, the choice between using the standard deduction and itemizing deductions from AGI is a sinple matter-pick whichever yields
the larger tax benefit. However, taxes might be saved by alternating between the two options by tax planning.
b. What would the Bates' total itemized deductions be if all three church pledge payments were made in 2020? Assume that the itemized
deductions of $22,000 already included one year of the church pledge payments.
What will be the Bates' tax saving if their marginal tax bracket is 24% for all three years?
(Assume that the standard deduction amounts for 2020 and 2021 are the same.)
By concentrating their charitable contributions, their
savings becomes $
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