Question

Tim is a single, cash-method taxpayer with an AGI of $50,000. In April of this year, Tim paid $900 with his state income tax return for the previous year. During the year, Tim had $4,600 of state income tax and $16,500 of federal income tax withheld from his salary. In addition, Tim made estimated payments of $1,100 and $1,700 of state and federal income taxes, respectively. Finally, Tim expects to receive a refund of $420 for state income taxes when he files his state tax return for this year in April next year. What is the amount of taxes that Tim can deduct as an itemized deduction?

Answer 1

Calculate the estimated payments of state taxes:
State income tax withheld during the year = $4600
State income tax previous year = $900
Estimated payment of statement income tax made = $1100
Estimated payments of state taxes = State income tax with held during the year + State income tax previous year + Estimated payment of statement income tax made
=$4600+$900+$1100
=$6600