Question

Michele Barbour is considering an additional charitable contribution of $3,900 to a tax-deductible charity, bringing her total itemized deductions to $24,000. If Michelle is in a 28 percent tax bracket, how much will this $3,900 contribution reduce her taxes?

a. $6,720
b. $1,092
c. $0
d.$3,90

Answer 1

Answer:

The correct answer is option (B).

Explanation:

According to the scenario, the given data are as follows:

Amount of Charitable Contribution = $3,900

Tax Rate = 28%

So, we can calculate the value of reduction in taxes by using following formula:

Reduction in Taxes = Amount of Charitable Contribution × Tax Rate

= $3,900 × 28%

= $3,900 × 0.28

= $1,092

Hence, the value of reduction in taxes is $1,092.