Katie pays $10,000 in tax-deductible property taxes. Katie's marginal tax rate is 32%, average tax rate is 28%, and effective tax rate is 25%. Katie's tax savings from paying the property tax is:

Question

Quizplus · Accepted Answer

Katie's tax savings from paying the property tax is calculated by multiplying the amount of the tax-deductible expense ($10,000) by her marginal tax rate (32%). Therefore, the savings are $10,000 * 0.32 = $3,200.

Katie Pays $10,000 in Tax-Deductible Property Taxes