Margo has $2,200 withheld from her wages for state income taxes during 2018.In March of 2018, she paid $400 in additional taxes for her 2017 state tax return.Her state income tax liability for 2018 is $2,700 and she pays the additional $500 when she files her 2018 state tax return in April of 2019.What amount should Margo deduct as an itemized deduction for state income taxes on her 2018 federal income tax return, assuming she deducts state and local income taxes?

Question

Quizplus · Accepted Answer

The correct amount is $2,600. Margo's total state income tax liability for 2018 is $2,700. She withheld $2,200 from her wages and paid an additional $500 when she filed her 2018 state tax return. However, she also paid $400 in additional taxes for her 2017 state tax return. This means that she actually paid $2,600 in state income taxes for 2018.

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