Problem 3-43 (LO. 9)

Each year, Tom and Cindy Bates (married filing jointly) report itemized deductions of $20,000 (which includes an annual $4,000 pledge payment to their church). Upon the advice of a friend, they do the following: In early January 2019, they pay their 2018 pledge; during 2019, they pay the 2019 pledge; and in late December 2019, they prepay their 2020 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 2019? Assume that the itemized deductions of $20,000 already included one year of the church pledge payments.: $ 28,000

What will be the Bates' tax saving if their marginal tax bracket is 24% for all three years?

(Assume that the standard deduction amounts for 2019 and 2020 are the same.)

By concentrating their charitable contributions, their tax savings becomes $______ .