Buddy Slaton has only one itemized deduction item, the $3,000 he gave to his church. His standard deduction this year is $5,450, and he is in the 15% marginal tax bracket. How much will his contribution to the church save Buddy in taxes this year?

$0

Explanation:

Tax payers can elect to use either standard deduction or itemized deduction to reduce their taxable income, for them to pay least amount of tax on their taxable income. Standard deduction is calculated and given in accordance with the provision of the tax law while itemized deduction is a list of items that the tax payer has incurred and expecting to except from tax, examples of this includes donation to charities and interest paid on mortgage.

Taxpayers normally elect the higher of standard deduction and itemized deduction to reduce their tax liability to the lowest.

In the case of Buddy Slaton, electing for itemized deduction of contributing to church($3,000) will save her no tax since the standard deduction is greater ($,5450).

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.