Opal deducted $2,400 of state income taxes on her tax return last year.This year she received a state income tax refund of $170.What amount of the refund, if any, should Opal include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

Question

Quizplus · Accepted Answer

Opal should include the full amount of her state income tax refund ($170) in her gross income because she benefited from deducting state income taxes last year. The fact that her itemized deductions exceeded the standard deduction by $350 is irrelevant to the amount of the refund she must include in her income.

Opal Deducted $2,400 of State Income Taxes on Her Tax