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Janet is a single mother of two. Her salary of $50,000 covers her living expenses of which she has a monthly mortgage payment of $850
- Janet is a single mother of two. Her salary of $50,000 covers her living expenses of which she has a monthly mortgage payment of $850 (inclusive of taxes and insurance), travel expenses of $10,000 subject to the threshold for deductions from AGI; she is also eligible for the child care credit deduction. Furthermore, she makes a 401(k) contribution of $300 per month and $100 to her IRA montly.
- What recommendations can you make regarding the following?
- Should she itemize or take the Standard Deduction given this is tax year 2020?
- In terms of funding the IRA or the 401(k), which should she maximize first and why?
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