Ruth, who files as head of household, reported itemized deductions of $9,200 on her 2014 tax return. Her itemized deductions included $300 of state taxes paid. In 2015, she received a $175 refund of state taxes paid in 2014. What is the amount that Ruth needs to report on her 2015 tax return?

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Ruth reported state taxes of $300 on her 2014 tax return, which was included in her itemized deductions total of $9,200. Since she received a $175 refund in 2015 for the state taxes paid in 2014, she must deduct this amount from her 2014 itemized deductions. Therefore, her new total itemized deductions for 2014 will be $9,025 ($9,200 - $175). She will report this new amount on her 2015 tax return since it is the total of her previously reported deductions. The $175 refund itself is not taxable income and does not need to be reported. Therefore, the answer is C) $100 (the amount that was reduced from her itemized deductions).

Ruth, Who Files as Head of Household, Reported Itemized Deductions