Margo has $2,100 withheld from her wages for state income taxes during 2013.In March of 2013,she paid $300 in additional taxes for her 2012 state tax return.Her state income tax liability for 2013 is $2,500 and she pays the additional $400 when she files her 2013 state tax return in April of 2014.What amount should Margo deduct as an itemized deduction for state income taxes on her 2013 federal income tax return,assuming she elects to deduct state and local income taxes?

Question

Quizplus · Accepted Answer

Margo should deduct the total amount of state income taxes paid in 2013, which includes the $2,100 withheld from her wages and the $400 paid when she filed her tax return in April 2014 for the 2013 tax year. However, the $300 she paid in March 2013 was for her 2012 state tax return and cannot be included in her itemized deduction for 2013. Therefore, the total amount she can deduct for state income taxes on her 2013 federal income tax return is $2,400 ($2,100 + $400 - $300).

Margo Has $2,100 Withheld from Her Wages for State Income