question archive Each year, the Hundleys normally have itemized deductions of $9500, including a $3600 pledge payment to their church
Each year, the Hundleys normally have itemized deductions of $9500, including a $3600 pledge payment to their church
Subject:BusinessPrice: Bought3
Each year, the Hundleys normally have itemized deductions of $9500, including a $3600 pledge payment to their church. Upon the advice of a friend, they do the following: in early January 2007, they pay their pledge for 2006; during 2007, they pay the pledge for 2007; and in late December 2007, they prepay their pledge for 2008.
a. Explain what the Hundleys are trying to accomplish.
b. What will be the tax saving if their marginal tax bracket is 25% for all three years? (Assume the standard deduction amounts for 2007 and 2008 are the same).
