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Business & farm
Often taxpayers do not understand their
1. standard and itemized deductions and
2. their marginal tax bracket.
For example, a taxpayer pays mortgage interest and state taxes and makes charitable contributions that sum to an amount just below the standard deduction. The taxpayer would be better off shifting the charitable contributions into one particular year so itemized deductions can be claimed for that year.
The importance of understanding the marginal tax bracket is you want to have your larger itemized deductions in years when you are in the 32% marginal tax bracket versus the 22% marginal tax bracket.
May 22, 2024
4:34 PM