Question

Mr. and Mrs. Nedage are filing a joint tax return. While listing their deductions, they find that they can deduct $2,150 from medical bills, $826 from state taxes, $3,133 from charitable donations, and $1,331 from interest on their mortgage. The standard deduction for married couples filing jointly is $8,350. How does the standard deduction compare to the Nedages’ deductions?
a.
The Nedages’ deductions are $1,740 better than the standard deduction.
b.
The Nedages’ deductions are $7,440 better than the standard deduction.
c.
The standard deduction is $910 better than the Nedages’ deductions.
d.
The standard deduction is $9,260 better than the Nedages’ deductions.

Answer 1

c. The itemized deductions total $2,150 + $826 + $3,133 + $1,331 = $7,440, which is $8,350 − $7,440 = $910 less than the standard deduction.