Question: 1. Betty Sims has $30,000 of adjusted gross income and $5,000 of medical expenses. She will be itemizing her tax deductions this year. The most recent tax year has a medical expenses floor of 10 percent. How much of a tax deduction will Betty be able to take?
2. Would you prefer a fully taxable investment earning 10 percent or a tax-exempt investment earning 8.25 percent? Why?
3. If a person in a 33 percent tax bracket makes a deposit of $5,000 to a tax-deferred retirement account, what amount would be saved on current taxes?