If you saved $2,000 in a flexible savings account while in a 35% marginal tax bracket, how much would you save in taxes?

To determine how much you would save in taxes by contributing to a flexible savings account while in a 35% marginal tax bracket, you multiply your contribution amount by your tax rate.

In this scenario, you've saved $2,000 in the account. Since you are in a 35% marginal tax bracket, you calculate the tax savings by taking 35% of $2,000. The calculation is:

Tax savings = Contribution x Tax rate
Tax savings = $2,000 x 0.35
Tax savings = $700

This means that by contributing to the flexible savings account, you effectively reduce your taxable income by the $2,000, resulting in a tax savings of $700. This approach to calculating tax savings illustrates the benefit of tax-advantaged accounts, helping to lower the overall tax burden for individuals in higher tax brackets.