This year Norma, a single taxpayer, paid $11,200 of real estate taxes on her personal residence and 9,500 of state income taxes. Which of the following is a true?
A) Norma can deduct $11,200 of real estate taxes as an itemized deduction.
B) Norma can deduct $9,500 of state income taxes as a for AGI deduction.
C) Norma can deduct $10,000 of taxes as an itemized deduction.
D) Even if Norma has no other itemized deductions, she should claim the standard deduction.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The Tax Cuts and Jobs Act of 2017 limits the amount of state and local taxes that a taxpayer can deduct to $10,000. Norma's total of $20,700 ($11,200 + $9,500) exceeds this limit, so she can only deduct $10,000 of taxes as an itemized deduction. She cannot deduct the excess amount as a for AGI deduction. If Norma has no other itemized deductions that exceed the standard deduction, it may be more beneficial for her to claim the standard deduction.

This Year Norma, a Single Taxpayer, Paid $11,200 of Real