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Explain what the Bateses are trying to accomplish

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Problem - Each year, Tom and Cindy Bates report itemized deductions of $20,000 (which includes a $4,000 pledge payment to their church). Upon the advice of a friend, they do the following: in early January 2019, they pay their 2018 pledge; during 2019, they pay the 2019 pledge; and in late December 2019, they prepay their 2020 pledge.

Required -

a. Explain what the Bateses are trying to accomplish.

b. What will be the tax saving if their marginal tax bracket is 24% for all three years? (Assume that the standard deduction amounts for 2019 and 2020 are the same.)

c. Write a letter to Tom and Cindy Bates (8212 Bridle Court, Reston, VA 20194) summarizing your analysis.

Reference no: EM132665627

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