In: Accounting
Ruth, who files as single, reported itemized deductions of $12,300 on her 2018 tax return. Her itemized deductions included $400 of state taxes paid. In 2019, she received a $275 refund of state taxes paid in 2018. What is the amount that Ruth needs to report on her 2019 tax return?
A) $400. B) $275. C) $300. D) $0.
Correct Answer is B. $275
Itemized deductions in 2018 - $12300
Standard deductions in 2018 - Itemized deduction - Refund received
$12025 ($12300-$275)
Amount reported in 2019 Tax return = $12300- $12025
= $275.