Question 1

During the current year, Seth, a self-employed individual, paid the following taxes: What amount can Seth claim as an itemized deduction for taxes paid during the current year, assuming he elects to deduct state and local income taxes?

Accepted Answer

The answer of During the current year, Seth, a self-employed...

Question 2

During the current year, Mr. and Mrs. West paid the following taxes: What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

Accepted Answer

The Wests can deduct $2,900 as property taxes in calculating itemized deductions for the current year, since property taxes paid for their primary residence and vacation home, as well as the car registration fee deductible as personal property tax, all qualify for the property tax deduction.

Question 3

To calculate the amount of state and local income taxes which may be deducted as an itemized deduction, state income taxes paid during the year must be reduced by state income tax refunds received during the year.

Accepted Answer

The answer of To calculate the amount of state and...

Question 4

Meade paid $5,000 of state income taxes in 2016. The total actual sales taxes paid during 2016 was $4,500, which did not include $3,000 for the sales taxes paid in 2016 on Meade's new boat. How should Meade treat the taxes paid in his 2016 tax return?

Accepted Answer

The answer of Meade paid $5,000 of state income taxes...

Question 5

Weber resides in a state that imposes a tax on income. The following information relating to Weber's state income taxes is available: Assuming he elects to deduct state and local income taxes, what amount should Weber use as state and local income taxes in calculating itemized deductions for his 2016 Federal income tax return?

Accepted Answer

The answer of Weber resides in a state that imposes...

Question 6

Daniel lives in a state that charges a vehicle registration fee of $50 plus $20 for every $1,000 of value. During the current year, Daniel paid $170 for registration of his automobile.
a.​
How much of the vehicle registration fee is deductible as a personal property tax on Schedule A of Daniel's Form 1040?
b.Explain your answer.

Accepted Answer

The answer of Daniel lives in a state that charges...

Question 7

Harvey itemized deductions on his 2015 income tax return. Harvey plans to itemize deductions again in 2016 and the following information is available regarding state and local income taxes: Assuming he elects to deduct state and local income taxes, the above information should be reported by Harvey in his 2016 tax return as:

Accepted Answer

The answer of Harvey itemized deductions on his 2015 income...

Question 8

Sherry had $5,600 withheld from her wages for state income taxes during 2016. In May of 2016, she received a $450 refund for her prior year state tax return. The amount of Sherry's tax on her 2016 tax return is $6,100 and she pays the additional tax of $500 ($6,100 - $5,600) when she files her state income tax return in April of 2017.
a.​
Assuming she elects to deduct the state income tax, how much state income taxes should Sherry deduct on Schedule A of Form 1040 of her 2016 federal income tax return?
b.How should Sherry report the $450 refund?

Accepted Answer

The answer of Sherry had $5,600 withheld from her wages...

Question 9

Taxpayers are permitted to take an itemized deduction for the lesser of state income taxes paid or state sales taxes paid.​

Accepted Answer

The answer of Taxpayers are permitted to take an itemized...

Question 10

​Stan, a single taxpayer, has $1,700 of state income taxes withheld from his wages in the current year. In the current year, he also received a $320 refund on his prior year state income tax. Stan did not itemize last year but he intends to do so this year. Stan used the sales tax estimate tables and determined his sales tax deduction amount is $1,600. What amount should Stan deduct for state taxes?

Accepted Answer

Stan should deduct the $1,700 of state income taxes withheld from his wages in the current year. He cannot deduct the $320 refund he received on his prior year state income tax. Additionally, since his sales tax deduction is lower than his state income tax deduction, he should use the state income tax deduction instead. Therefore, he should deduct $1,700 for state taxes.

Question 11

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: What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2016 Federal tax return, assuming he elects to deduct state and local income taxes?

Accepted Answer

The answer of Frank is a resident of a state...

Question 12

Margo has $2,200 withheld from her wages for state income taxes during 2016. In March of 2016, she paid $400 in additional taxes for her 2015 state tax return. Her state income tax liability for 2016 is $2,700 and she pays the additional $500 when she files her 2016 state tax return in April of 2017. What amount should Margo deduct as an itemized deduction for state income taxes on her 2016 federal income tax return, assuming she elects to deduct state and local income taxes?

Accepted Answer

Margo can deduct the total paid during the tax year for state income taxes, including the $400 in March 2016 for her 2015 state tax return, and the $2,700 she owes for 2016, totaling $3,100. However, she paid the additional $500 when she files her 2016 state tax return in April of 2017, which is not included in the tax year 2016. Therefore, her itemized deduction for state income taxes on her 2016 federal income tax return is $2,600 ($2,200 withheld in 2016 plus $400 paid in March 2016). Therefore, the correct answer is C) $2,600.

Question 13

The cost of a fishing license is considered a personal property tax and is deductible as an itemized deduction.

Accepted Answer

The cost of a fishing license is not deductible as an itemized deduction. Personal property taxes that are deductible include taxes on cars, boats, and airplanes.

Question 14

Newt is a single taxpayer living in Hollywood, California, with adjusted gross income for the 2016 tax year of $43,050. Newt's employer withheld $3,700 in state income tax from his salary. In April of 2016, he paid $300 in additional state taxes for his prior year's return. The real estate taxes on his home are $1,800 for 2016 and his personal property tax based on the value of his automobile is $75. Also, he paid $210 for state gasoline taxes for the year. The IRS estimate of general sales tax for Newt is $1,200 for 2016.
​
How much should Newt deduct on Schedule A of Form 1040 of his 2016 tax return for taxes paid?

Accepted Answer

The answer of Newt is a single taxpayer living in...

Question 15

Which of the following is not deductible as an itemized deduction?

Accepted Answer

The answer of Which of the following is not deductible...

Question 16

In 2016, state income taxes may be deducted as an itemized deduction on Schedule A.

Accepted Answer

State income taxes can be deducted as an itemized deduction on Schedule A in 2016. However, the deduction is subject to a limitation based on the taxpayer's federal adjusted gross income.

Question 17

Which one of the following is not tax deductible?

Accepted Answer

All of the options listed (real estate taxes, property taxes, local income taxes, and state income taxes) are tax deductible.

Question 18

The amount of a special assessment charged to residents for the installation of sidewalks on their street is not deductible on Schedule A as property taxes.

Accepted Answer

Special assessments, such as those for sidewalks, are not considered property taxes and are therefore not deductible on Schedule A.

Question 19

Which of the following taxes is not deductible as an itemized deduction?

Accepted Answer

Federal income tax is not deductible as an itemized deduction.

Question 20

During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he elects to deduct state and local income taxes?

Accepted Answer

The answer of During the current year, George, a salaried...

Quiz 5: Itemized Deductions and Other Incentives