Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase?
A) $13,250
B) $ 5,040
C) $ 3,710
D) $ 2,800
E) none

Question

Jackie is in the 28% marginal tax bracket and has no other itemized deductions except those related to her home.If her standard deduction is $4,750 and she incurs the following costs related to housing,how much tax savings will she receive as a result of her home purchase? 
A) $13,250 
B) $ 5,040 
C) $ 3,710 
D) $ 2,800 
E) none

Quizplus · Accepted Answer

Since Jackie is in the 28% marginal tax bracket, her tax savings will be 28% of the total cost related to housing. The only cost related to housing mentioned in the question is the mortgage interest paid, which is $13,250. Therefore, her tax savings will be 28% of $13,250, which equals $3,710. Since her standard deduction is already accounted for, the only tax savings she will receive is from itemized deductions related to her home. Therefore, the answer is C.

Jackie Is in the 28% Marginal Tax Bracket and Has