sarah has two dependent children who attend sun valley day care while she is at work. she will claim a $1,200 credit for child a

Question

andrey2020 [161]

1 year ago

11

sarah has two dependent children who attend sun valley day care while she is at work. she will claim a $1,200 credit for child a

nd dependent care expenses in the current tax year. what amount of deduction is necessary to provide a tax benefit that is equal to that provided by the child care credit if sarah is in the 24% marginal income tax bracket?

Business

1 answer:

castortr0y [4] · Answer 1 · 2023-10-19T06:32:38+03:00

If Sarah is in the income tax band that has a marginal rate of 24%, the amount of the deduction that must be taken in order to generate a tax advantage that is equivalent to that provided by the child care credit is x = 5000.

This is further explained below.

<h3> What amount of deduction is necessary to provide a tax benefit that is equal to that provided by the child care credit if Sarah is in the 24% marginal income tax bracket?</h3>

Generally, The proportion of an individual's income that must be paid in taxes is referred to as that person's marginal tax rate.

The average tax burden may be conceptualized as the entire tax burden expressed as a proportion of the income that is produced.

Tax: Taxes are payments to the government that is required of all citizens, whether they be people or companies.

In conclusion,

Available deduction = 1200

Deduction rate = 0.24

Amount of money needed for an investment

x= 1200/0.24

x= 5000