Emma and Conner are in the 10% tax bracket. This means they must pay 10% of their income as tax. However, since they itemize their taxes, they may deduct the amount of their charitable donation from their income.
Thus, assuming they earned at least $1300, they do not have to pay the 10% of the $1300 they donated. Ten percent of $1300 is $130. Thus, $130 would have gone to the government in taxes if they had not donated it; that is the amount their tax bill has been reduced.
The theory is that the government would have had to pay that $130 to help others if Emma and Conner did not contribute it. This justifies this deduction.
Thus, assuming they earned at least $1300, they do not have to pay the 10% of the $1300 they donated. Ten percent of $1300 is $130. Thus, $130 would have gone to the government in taxes if they had not donated it; that is the amount their tax bill has been reduced.
The theory is that the government would have had to pay that $130 to help others if Emma and Conner did not contribute it. This justifies this deduction.
