Question

Decide whether you should itemize your deductions or take the standard deduction in the following case. State how much the better option will save you. Assume the standard deduction is $.

Your filing status is single. Your deductible expenditures are:

$ for interest on a home mortgage
$ for contributions to charity
$ for state and local taxes.

Answer 1

In this case, you should itemize your deductions instead of taking the standard deduction. Calculate your savings by subtracting your deductible expenditures from your taxable income and comparing the taxes owed when itemizing to the taxes owed with the standard deduction.

Step-by-step explanation:

In this case, you should itemize your deductions instead of taking the standard deduction. When you itemize your deductions, you can deduct the specific amounts you spent on mortgage interest, charity contributions, and state and local taxes from your taxable income.

Let's calculate the savings:

• Mortgage interest: $[insert amount]
• Charity contributions: $[insert amount]
• State and local taxes: $[insert amount]

Add up these amounts to find your total deductible expenditures: $[insert total]. Subtract this amount from your taxable income to find your new taxable income.

Calculate your taxes owed using the appropriate tax rates and brackets. Compare the taxes owed when itemizing your deductions to the taxes owed with the standard deduction. The difference between the two amounts is the amount you save by itemizing your deductions.