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Kristina paid mortgage interest of $6,320.00 and Medical Expenses of $$19,500.00 during 2022. Her GROSS INCOME was $32,500.

19. How much did she save by
itemizing her deductions?

User Matt Price
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1 Answer

5 votes

Answer:

$448.25

Explanation:

For her medical expenses, it has to be more than 7.5% of her gross income of $32,500 => 7.5% of $32,500 = $2437.5.

so her deduction for medical expenses is $19,500 - $2437.50 = $17,062.5

so her total itemized deduction is $6,320.00 + $17,062.50 = $23,382.50

Given Kristina will file a single so her standard deduction for 2022 is $12,950.

If she uses standard deduction, her taxable income is 32,500 - 19,500 = 13,000

For the first 10,000 taxed at 10% so it is 10,000 x 10% = $1,000

The next $3000 taxed at 12% = $360

Her total tax is $1,000 + $360 = $1,360

If she uses itemized deduction, her taxable income is 32,500 - 23,382.50 = 9117.5

For the first 10,000 taxed at 10% so it is 9117.5 x 10% = $911.75

The tax saved is $1,360 - $911.75 = $448.25

Hope this helps.

User DimG
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