Question

On December 30, you decide to make a $2,500 charitable donation. (Assume you itemize your deductions.) (a) If you are in the 24 percent tax bracket and you expect to itemize your deductions, how much will you save in taxes for the current year

Answer 1

By making a $2,500 donation, an individual in the 24 percent tax bracket would save $600 on their taxes for that year, assuming they itemize their deductions.

Step-by-step explanation:

When you make a charitable donation and are able to itemize your deductions, this can result in tax savings. If you are in the 24 percent tax bracket, your savings are calculated by multiplying the donation amount by your tax bracket percentage. In the given scenario, a $2,500 donation would lead to a tax saving of:

Tax savings = Donation amount × Tax bracket

Tax savings = $2,500 × 24%

Tax savings = $2,500 × 0.24

Tax savings = $600

Therefore, by making a $2,500 donation, you would save $600 in taxes for the current year, provided that you itemize your deductions and are in the 24 percent tax bracket.

Answer 2

$600

Step-by-step explanation:

Calculation to determine how much will you save in taxes for the current year

Using this formula

Tax savings = Tax rate × Tax deduction

Let plug in the formula

Tax savings= 0.24 × $2500

Tax savings =$600

Therefore how much will you save in taxes for the current year is $600