Questions: Roberto Clemente's marginal federal income tax rate is 24%. How much money will Roberto save in federal income taxes if he deposits the 14,009 in a tax-deferred retirement account instead of depositing it in a taxable account? Taxes round to the dollar.

Solution Steps

To determine how much money Roberto will save in federal income taxes by depositing his money in a tax-deferred retirement account, we need to calculate the tax he would pay if the money were in a taxable account and then compare it to the tax he would pay if the money were in a tax-deferred account. Since the tax-deferred account defers taxes, the immediate tax savings is the tax amount on the $14,009 at his marginal tax rate.

To find the tax savings from depositing \$14,009 in a tax-deferred retirement account, we first calculate the tax that would be owed if the amount were in a taxable account. The tax owed can be calculated using the formula:

\[ \text{Tax Savings} = \text{Amount} \times \text{Marginal Tax Rate} \]

Substituting the given values:

\[ \text{Tax Savings} = 14009 \times 0.24 = 3362.16 \]

Since the problem specifies that taxes should be rounded to the dollar, we round the calculated tax savings:

\[ \text{Tax Savings (rounded)} = \text{round}(3362.16) = 3362 \]

Final Answer