Virginia is a cash-basis, calendar-year taxpayer. Her salary is $90,000, and she is single. She plans to purchase a residence in 2023. She anticipates her property taxes and interest will total $8,100. Each year, Virginia contributes approximately $4,000 to charity. Her other itemized deductions total approximately $4,450 for each year. For purposes of this problem, assume that 2023 tax rates and standard deductions are the same as for 2022.
a. What will her gross tax be in 2022 and 2023 if she contributes $4,000 to charity in each year?
b. What will her gross tax be in 2022 and 2023 if she contributes $8,000 to charity in 2022 but makes no contribution in 2023?
c. What will her gross tax be in 2022 and 2023 if she makes no contribution in 2022 but contributes $8,000 in 2023?
d. Alternative c results in a lower tax than either a or b. Why?