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Please explain Problem 3-52 (Lo. 9) Each year, Tom and Cindy Bates (who file married-filing jointly) report itemized deductions of $10,000, including an annual $4,000
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Problem 3-52 (Lo. 9) Each year, Tom and Cindy Bates (who file married-filing jointly) report itemized deductions of $10,000, including an annual $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: In early January 2017, they pay their 2016 pledge; during 2017, they pay the 2017 pledge; and in late December 2017, they prepay their 2018 pledge a. What are the Bateses trying to accomplish? To have their itemized deductions exceed the standard deduction b. What would the Bates' total itemized deductions be if all three church pledge payments were made in 2017? Assume that the itemized deductions of $10,000 already included one year of the church pledge payments. what will be the Bates' tax saving if their marginal tax bracket is 25% for all three years? (Assume that the standard deduction amounts for 2017 and 2018 are the same.) By concentrating their charitable contributions, their tax savings becomes c. Complete a letter to Tom and Cindy Bates (8212 Bridle Court, Reston, VA 20194) summarizing your analysisStep by Step Solution
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