Veronica filed as a single taxpayer in 2019. Her AGI was $249,000, and itemized deductions were...

Veronica filed as a single taxpayer in 2019. Her AGI was $249,000, and itemized deductions were $45,600. Her local property taxes were $15,600 and her state income taxes were $20,000. In 2020, Veronica received a $3,000 refund of the state income taxes she paid in 2019. The standard deduction for single filers in 2019 was $12,200.

Apply the tax benefit rule to determine the amount of the state income tax refund included in gross income in 2020.

Expert Solution

0 will be added ie refund will not be added in Veronica gross income in 2020

	2019
Total Itemise Deduction taken for State and Local taxes	$10000
Total Standard deduction limit in 2019	$12200

	$2200

As the difference in itemised deduction taken for State and local taxes are lower than Standard Deduction , No refund will be Included in Veronica Income

As per Section 164 there is limit of adding Itemised Deduction for State and Local Taxes Limit is upto $10000

1)An itemized deduction is an expenditure on eligible products, services, or contributions that can be claim as deduction to reduce your tax bill. Itemized deductions are listed on Schedule A of Form 1040

2)Standard deduction is provided by federal law , which is not itemised deduction

3)As per IRS , Federal law If tax payer get refund in past year due to Itemized deduction and the benefit arises from such deduction will be taxable in the current year if any refund arises from that itemise deduction, but any refund arises due to non itemise deduction ie standard deduction is claimed in past year , than no tax liability will arise on that refund and it will not be included in current assessment year

As the State tax was 20000 of out which only $10000 can be itemised hence the refund benefit is not arising due to itemised deduction of state tax

ekkarill92 answered 2 years ago

Myrna and Geoffrey filed a joint tax return in 2018. Their AGI was $85,000, and itemized deductions were $24,700

Myrna and Geoffrey filed a joint tax return in 2018. Their AGI was $85,000, and itemized deductions were $24,700, which included $7,000 in state income tax and no other state or local taxes. In 2019, they received a $1,800 refund of the state income taxes they paid in 2018. The standard deduction for married filing jointly in 2018 was $24,000. Under the tax benefit rule, what amount of the state income tax refund is included in gross income in 2019?

A) Determine the AGI this year for the taxpayer(s). B) Determine the amount of itemized deductions...

A) Determine the AGI this year for the taxpayer(s). B) Determine the amount of itemized deductions the taxpayer(s) has (have) available this year. C) Using the 2017 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in of your book, state whether the taxpayer(s) itemize or take the standard deduction. I am not asking for you to state the amount of either the standard deduction or the itemized deductions chosen. D) Use the individual tax...

Jesse Brimhall is single. In 2019, his itemized deductions were $9,000 before considering any real property...

Jesse Brimhall is single. In 2019, his itemized deductions were $9,000 before considering any real property taxes he paid during the year. Jesse’s adjusted gross income was $70,000 (also before considering any property tax deductions). In 2019, he paid real property taxes of $3,000 on property 1 and $1,200 of real property taxes on property 2. He did not pay any other deductible taxes during the year. a. If property 1 is Jesse’s primary residence and property 2 is his...

In 2019, a single engineer had a gross income of $68,000 and itemized deductions of $13,400....

In 2019, a single engineer had a gross income of $68,000 and itemized deductions of $13,400. Determine the amount of minimum federal tax he must pay.

Ruth, who files as single, reported itemized deductions of $12,300 on her 2018 tax return.

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.

AGI Deductions Vs. From AGI Deductions (LO. 6) Reba's 2019 income tax calculation is as follows:...

AGI Deductions Vs. From AGI Deductions (LO. 6) Reba's 2019 income tax calculation is as follows: Gross income $120,000 Deductions for adjusted gross income (3,000) Adjusted gross income $117,000 Deductions from adjusted gross income: Standard deduction (12,200) (Total itemized deductions are $2,300) Taxable income $104,800 Before filing her return, Reba finds an $8,000 deduction that she omitted from these calculations. Although the item is clearly deductible, she is unsure whether she should deduct it for or from adjusted gross income....

Demeter is a single taxpayer. Her AGI in 2020 is $209,200. Demeter may claim a child...

Demeter is a single taxpayer. Her AGI in 2020 is $209,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out? Show Work

Becky, 25 years old, is a single taxpayer who uses the standard deduction. Her AGI is...

Becky, 25 years old, is a single taxpayer who uses the standard deduction. Her AGI is $61,000. After she finished her accounting degree at Minnesota, she decided to enroll in a local community college to take one class in art history as a part time student. The cost of the course was $1500. Compute the amount of education tax credits available to her in 2020 and specify the name of the tax credit that she is eligible for.

Lacy is a single taxpayer. In 2019, her taxable income is $42,100. What is her tax...

Lacy is a single taxpayer. In 2019, her taxable income is $42,100. What is her tax liability in each of the following alternative situations? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. Can you please show me step by step? a. Tax Liability b. Her $42,100 of taxable income includes $3,600 of qualified dividends. c. Her $42,100 of taxable income includes $6,300 of qualified dividends.

1) Use the hypothetical information provided below on AGI, Family Structure and Filing Status, Itemized Deductions...

1) Use the hypothetical information provided below on AGI, Family Structure and Filing Status, Itemized Deductions (relative to the Standard deduction), Withholdings, Tax Credits, and the tax rates to compute the average and marginal tax rate for a taxpayer. AGI=$95,000; Married Filing Jointly; 2 Children; Itemized Deductions=$15,000; Standard Deduction=$20,000; Personal Exemptions $4000 per person; Child Credit $1000 per child. Withholding=$9,000; Tax Rates: 10% for first $10000 of Taxable Income; 15% of next $50,000 of taxable income; 25% of the rest.

Question