If a taxpayer is in a 24% marginal tax bracket, how much will a $100 charitable contribution reduce their taxes?

When a taxpayer makes a charitable contribution, it can be deducted from their taxable income, which effectively lowers the amount of income subject to taxation. In this case, if the taxpayer is in a 24% marginal tax bracket, each dollar contributed will reduce their taxable income and thus their taxes by that percentage.

If the taxpayer contributes $100 to charity, the tax benefit is calculated by multiplying the contribution amount by the taxpayer’s marginal tax rate. Therefore, a $100 donation multiplied by a 24% tax rate results in a tax reduction of $24. This means that the contribution reduces the taxpayer's overall tax liability by $24.

It's important to recognize that the tax savings from the contribution will not equal the $100 donated, as the amount saved is directly tied to the marginal rate, rather than being a straightforward dollar-for-dollar reduction in taxes owed. This understanding is crucial for taxpayers when planning their charitable contributions and assessing their overall tax strategy.