Question

consider michelle and gladys, two neighbors who each earn the same salary. gladys pays less in federal income taxes than michelle does. which of the following is a possible explanation for this?
a. michelle and gladys are in different tax brackets.
b. gladys pays less in federal income taxes, but michelle pays less in state income taxes.
c. gladys has more money in savings than michelle.
d. gladys is taking advantage of more deductions and credits than michelle.

please select the best answer from the choices provided

a
b
c
d

Explanation:

• Option A: Same salary means same tax bracket (progressive tax), so A is wrong.
• Option B: The question is about federal income tax, state tax is irrelevant, so B is wrong.
• Option C: Savings amount doesn't directly affect federal income tax owed (unless related to deductions/credits, but the option doesn't state that), so C is wrong.
• Option D: Deductions and credits reduce taxable income or tax liability. If Gladys uses more, her federal tax can be less even with same salary.

Answer:

D. Gladys is taking advantage of more deductions and credits than Michelle.