Tim is a single, cash-method taxpayer with one personal exemption and an AGI of
ID: 2641818 • Letter: T
Question
Tim is a single, cash-method taxpayer with one personal exemption and an AGI of $48,000. In April of this year Tim paid $1,420 with his state income tax return for the previous year. During the year, Tim had $5,184 of state income tax and $17,520 of federal income tax withheld from his salary. In addition, Tim made estimated payments of $1,306 and $1,824 of state and federal income taxes, respectively. Finally, Tim expects to receive a refund of $480 for state income taxes when he files his state tax return for this year in April next year. What is the amount of taxes that Tim can deduct as an itemized deduction
Explanation / Answer
Tim can get deductions from state return for previous year and withheld state income tax from his salary and estimated state income tax:
Tim can deduct the itemized only from state income tax:
Calculations:
state income tax previous year =$1,420
Witheld state tax from salary =$5,184
estimated payments state tax =$1,306
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total itemized amount =$7,910
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