Margo has $2,200 withheld from her wages for state income taxes during 2019. In March of 2019, she paid $400 in additional taxes for her 2018 state tax return. Her state income tax liability for 2019 is $2,700 and she pays the additional $500 when she files her 2019 state tax return in April of 2020. What amount should Margo deduct as an itemized deduction for state income taxes on her 2019 federal income tax return, assuming she deducts state and local income taxes?
A)$2,100
B)$2,500
C)$2,600
D)$3,100
E)None of these

Question

Quizplus · Accepted Answer

The correct answer is C. Margo's itemized deduction for state income taxes on her 2019 federal income tax return is $2,600. This is calculated as follows:Withheld from wages: $2,200Additional taxes paid in March 2019: $400Additional taxes paid in April 2020: $500Total state income taxes paid: $2,200 + $400 + $500 = $3,100Less: State income tax liability: $2,700Itemized deduction: $3,100 - $2,700 = $2,600

Margo Has $2,200 Withheld from Her Wages for State Income