Frank is a resident of a state that imposes a tax on income.The following information pertaining to Frank's state income taxes is available: $\begin{array}{llcc}
\text { State income taxes withhel d in 2018 } & \$3,500 \
\text { Refund of 2015 tax received in 2018 } &\$400\
\text {Deficiency assessed and paid in 2018 for 2016 : } &\
\text {State tax } &\$600\
\text {Interest } &\$100\
\text { } &\
\end{array}$
What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2018 Federal tax return, assuming he deducts state and local income taxes?

Question

Frank is a resident of a state that imposes a tax on income.The following information pertaining to Frank's state income taxes is available: $\begin{array}{llcc}
  \text { State income taxes withhel d in 2018 } & \$3,500 \
 \text { Refund of 2015 tax received in 2018 } &\$400\
 \text {Deficiency assessed and paid in 2018 for 2016 :  } &\
 \text {State tax  } &\$600\
 \text {Interest  } &\$100\
 \text {  } &\
\end{array}$
 What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2018 Federal tax return, assuming he deducts state and local income taxes?

Quizplus · Accepted Answer

The amount of state and local income taxes that Frank can deduct on his 2018 federal tax return is $4,100. This is calculated by adding the state income taxes withheld in 2018 ($3,500) to the refund of 2015 tax received in 2018 ($400), and then subtracting the deficiency assessed and paid in 2018 for 2016 ($600).

Frank Is a Resident of a State That Imposes a Tax