Tom and Betsy,who are married filing jointly,reported a standard deduction of $12,600 on their 2015 tax return.They paid $500 to the state for income taxes in 2015.In 2016,they received a $125 refund of state taxes paid in 2015.What is the amount that Tom and Betsy need to report on their 2016 tax return?

Question

Quizplus · Accepted Answer

Since Tom and Betsy used the standard deduction in 2015, they did not benefit from the state tax payment as an itemized deduction. Therefore, the state tax refund of $125 does not need to be reported as income on their 2016 tax return.

Tom and Betsy,who Are Married Filing Jointly,reported a Standard Deduction