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?

Even with the same salary, Michelle and Gladys may owe different federal income taxes if they claim different deductions or tax credits. If Gladys takes advantage of more deductions and credits, her taxable income or tax bill can be lower. Having more savings does not by itself lower federal income taxes, and a difference in state taxes does not explain a difference in federal taxes.

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