Randy is a single individual who receives a salary of $30,000. During 2018, he has $7,000 withheld for payment of his federal income taxes and $2,500 for his state income taxes. In 2019, he receives a $400 refund after filing his 2018 federal tax return and a $50 refund after filing his state tax return.
I.Randy is allowed a deduction for the $2,500 of state taxes withheld from his salary on his 2018 federal tax return.
II.If Randy has total itemized deductions of $12,400 on his 2018 federal tax return, he must include the $50 state tax refund in his 2019 gross income.

Question

Randy is a single individual who receives a salary of $30,000. During 2018, he has $7,000 withheld for payment of his federal income taxes and $2,500 for his state income taxes. In 2019, he receives a $400 refund after filing his 2018 federal tax return and a $50 refund after filing his state tax return.
I.Randy is allowed a deduction for the $2,500 of state taxes withheld from his salary on his 2018 federal tax return.
II.If Randy has total itemized deductions of $12,400 on his 2018 federal tax return, he must include the $50 state tax refund in his 2019 gross income.
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Quizplus · Accepted Answer

Randy can deduct state taxes withheld as an itemized deduction on his federal return. If he itemized deductions in 2018, he must include the state tax refund in his 2019 income.

Randy Is a Single Individual Who Receives a Salary of $30,000