María, age 32, earns $60,000 working in 2021. She has no other income. Her medical expenses for the year total $6,000. During the year, she suffers a casualty loss of $9,500 when her apartment is damaged by flood waters (part of a Federally declared disaster area). María contributes $6,000 to her church and pays $4,000 of state income taxes. On the advice of her friend, María is trying to decide whether to Contribute $5,000 to a traditional IRA. Complete the table to show the effect the IRA contribution would have on María's itemized deductions. Gross income Contribution to IRA AGI Itemized deductions: Charitable contribution State income taxes Medical expenses Casualty loss Total itemized deductions With IRA Contribution $ $ $ $ (5,000) The $5,000 IRA contribution would contribution reduces her taxable income by $ Without IRA Contribution 0 00000 María's itemized deductions by $ As a result, the $5,000 IRA
María, age 32, earns $60,000 working in 2021. She has no other income. Her medical expenses for the year total $6,000. During the year, she suffers a casualty loss of $9,500 when her apartment is damaged by flood waters (part of a Federally declared disaster area). María contributes $6,000 to her church and pays $4,000 of state income taxes. On the advice of her friend, María is trying to decide whether to Contribute $5,000 to a traditional IRA. Complete the table to show the effect the IRA contribution would have on María's itemized deductions. Gross income Contribution to IRA AGI Itemized deductions: Charitable contribution State income taxes Medical expenses Casualty loss Total itemized deductions With IRA Contribution $ $ $ $ (5,000) The $5,000 IRA contribution would contribution reduces her taxable income by $ Without IRA Contribution 0 00000 María's itemized deductions by $ As a result, the $5,000 IRA
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 6-35 (LO. 1)
María, age 32, earns $60,000 working in 2021. She has no other income. Her medical expenses for the year total $6,000. During the year,
she suffers a casualty loss of $9,500 when her apartment is damaged by flood waters (part of a Federally declared disaster area). María
contributes $6,000 to her church and pays $4,000 of state income taxes. On the advice of her friend, María is trying to decide whether to
contribute $5,000 to a traditional IRA.
Complete the table to show the effect the IRA contribution would have on María's itemized deductions.
Gross income
Contribution to IRA
AGI
Itemized deductions:
Charitable contribution
State income taxes
Medical expenses
Casualty loss
Total itemized deductions
With IRA Contribution
$
$
(5,000)
The $5,000 IRA contribution would
contribution reduces her taxable income by $
Without IRA Contribution
0
00000
María's itemized deductions by $
As a result, the $5,000 IRA
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