Question

Jake and Gloria are married, filing jointly. Their taxable income without deductions was $338,558. They were able to reduce their total income by $25,381 using Form 1040 and Schedule A. How much did they save in tax by claiming these deductions? Use the schedule below.

Answer 1

To calculate Jake and Gloria's tax savings, we need to find their taxable income before and after deductions and use the tax schedule to calculate their taxes owed. Subtracting the taxes owed after deductions from the taxes owed before deductions will give us the amount they saved in tax.

Step-by-step explanation:

To calculate how much Jake and Gloria saved in tax by claiming deductions, we need to find their taxable income before deductions and their taxable income after deductions. Then, we can calculate the difference in taxes using the tax schedule provided.

Based on the information given, Jake and Gloria's taxable income before deductions was $338,558. After deductions, their taxable income was reduced by $25,381. To find their tax savings, we need to calculate the taxes owed before and after deductions using the tax schedule. Subtracting the taxes owed after deductions from the taxes owed before deductions will give us the amount they saved in tax.

Let's use the tax schedule to calculate their taxes owed. First, find their taxable income without deductions in the table. Next, calculate the tax owed based on the income tax rate for that taxable income. Repeat the same process for their taxable income after deductions. Finally, subtract the taxes owed after deductions from the taxes owed before deductions to find the tax savings.

Answer 2

Jake and Gloria saved approximately $9390.97 in taxes by claiming their deductions.

Identified the applicable tax bracket: Based on their taxable income of $313,177 ($338,558 - $25,381), Jake and Gloria fall into the 32% marginal tax bracket.

Calculated the tax savings on deductions: Since their deductions amounted to $25,381, they saved $25,381 * 32% = $9390.97 in taxes.

Therefore, claiming their deductions helped Jake and Gloria save a significant amount of money on their taxes.