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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. With IRA Contribution Without IRA Contribution Gross income Contribution to IRA AGI Itemized deductions: Charitable contribution State income taxes (5,000) ·0 00

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. With IRA Contribution Without IRA Contribution Gross income Contribution to IRA AGI Itemized deductions: Charitable contribution State income taxes (5,000) ·0 00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 María's itemized deductions by $ As a result, the $5,000 IRA
Transcribed Image Text: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 María's itemized deductions by $ As a result, the $5,000 IRA
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