Question

Ms. Planner is in the 25% tax bracket and itemizes on her tax return. She plans to make a charitable contribution of $12,000 to her alma mater this year. The net cost of this contribution to Ms. Planner is:

Answer 1

Net cost = $9000

Step-by-step explanation:

Given data:

Tax is 25%

charitable contribution is $12,000

from the data given above tax saving can be calculated

Tax saving = 25% of $12,000

Tax saving
`=  0.25 * 12000`

Tax saving = $3,000

As contribution is considered to be deductible amount so Net cost is calculated as

Net cost = 12000 - 3000

Net cost = $9000