If your standard tax deduction for the year is $4,750, how much do you save by itemizing deductions?
February 21st, 2010I am unsure how to calculate this question.
Jack is single and his stndrd deduction is 50. IF he is in the 25% margnal tax bracket, how much tax would he save by using his itemized deduction of ,600?
Replys
$12,600 – $4,750 x 25%
His itemized deductions are $7,850 more than his standard deduction. Since he is taxed at 25% he would save 25% of $7,850 or $1,962.50.
-or-
(12600-4750) x 0.25
His savings for itemizing are 25% of the extra deduction – you take it from there…..
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