(a) By concentrating the payment of three years of charitable contributions (2018, 20179 and 2020) into one year, this will allow the Bates to itemized their deductions from AGI in 2019, otherwise their itemized deductions (normally $20,000) are of no benefit, as they do not exceed the standard deduction ($24,900 for 2018 and $25,000 for 2019).
(b) Resuming the $ 20,000 of normal itemized deductions already includes one year of church pledge payments, the additional payment of $8,000 ($4,000 for 2018 and $4,000 for 2019) yields itemized deductions $28,000 ($20,000+$8,000) for 2019. This exceeds the standard deduction that would have been given back by the amount of $3,000 ($28,000 - $25,000). Therefore the tax savings by concentrating the charitable contributions becomes $750 ($3,000*25%). The same tax that would have been paid will result for 2018 and 2020 as the standard deduction is claimed for each of these years.
(c) Letter to Tom and Cindy Bates:
January 31, 2020
Tom and Cindy Bates
8212 Bridle Court
Reston, VA 20194
In response to your enquiry regarding the federal income tax consequences of consolidating your charitable contributions for 2018, 2019 and 2020 into a single year (2019), here is a brief summary of the outcomes:
Problem 3-43 (LO. 9) Each year, Tom and Cindy Bates (married filing jointly) report itemized deductions...
Each year, Tom and Cindy Bates (married filing jointly) normally have itemized deductions of $20,000 (which includes an annual $4,000 pledge payment to their church). Upon the advice of a friend, they do the following: In early January 2019, they pay their pledge for 2018; during 2019, they pay the pledge for 2019; and in late December 2019, they prepay their pledge for 2020. a. What are the Bateses trying to accomplish? . b. What would the Bates' total itemized...
Problem 3-52 (LO.9) Each year, Tom and Cindy Bates (who file married-filing jointly) report itemized deductions of $10,000, induding an annual $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: In early January 2017, they pay their 2016 pledge; during 2017, they pay the 2017 pledge; and in late December 2017, they prepay their 2018 pledge. a. What are the Bateses trying to accomplish? b. What would the Bates total itemized deductions be...
Each year, Tom and Cindy Bates normally have itemized deductions of $20,000, including a $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: in early January 2018, they pay their pledge for 2017; during 2018, they pay the pledge for 2018; and in late December 2018, they prepay their pledge for 2019. Explain what the Bateses are trying to accomplish. What will be the tax saving if their marginal tax bracket is 24%...
eBook X Betonmentse sono portals Post Atte x Calculator o cha Rias x + 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...
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