Tony and liz montey both work for xyz corporation where tony earns $32,000 and liz earns $31,000. however, xyz corporation does not have a retirement plan for their employees. tony and liz have three-year old twin daughters named trisha and tasha. the following is information related to their taxes for the current tax year:
gross income $63,000
tony's traditional ira contribution $1,000
liz's traditional ira contribution $2,000
total itemized deductions $16,200
child credit per child $1,000
personal exemptions $3,950 each
standard deduction $12,400
marginal tax rate 15 percent
narrend
refer to figure 4-1. approximately how much will tony and liz save in taxes as a result of their ira contributions?
a. $3,000
b. $150
c. $1,000
d. $450