Question

Joyce is a​ single, cash-method taxpayer. On April​ 11, 2017​, Joyce paid $ 120 state income taxes with her 2016 state income tax return. During 2017​, Joyce had $ 1 comma 600 in state income taxes withheld. On April​ 13, 2018​, Joyce paid $ 200 with her 2017 state tax return. During 2018​, she had $ 2 comma 100 in state income taxes withheld from her paycheck. Upon filing her 2018 tax return on April​ 15, 2019​, she received a refund of $ 450 for excess state income taxes withheld. Joyce had total AGI in 2018 and 2019 of $ 51 comma 000 and $ 53 comma 500​, respectively. In 2018​, Joyce also paid $ 10 comma 500 in qualified residence interest. ..​(Click the icon to view the standard deduction​ schedule.). Requirement a. What is the amount of state income taxes Joyce may include as an itemized deduction for 2017​? First select the appropriate labels and then calculate the 2017 itemized deduction for state income taxes. ​(If an input field is not used in the table leave the input​ field(s) empty; do not select a label or enter a​ zero.) 2017 itemized deduction for state income taxes STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses $24,000 Heads of households 18,000 Unmarried individuals (other than surviving spouses and heads of households) 12,000 Married individuals filing separate returns 12,000 Additional standard deduction for the aged and the blind Individual who is married and surviving spouses 1,300 * Individual who is unmarried and not a surviving spouse 1,600 * Taxpayer claimed as dependent on another taxpayer’s return: Greater of (1) earned income plus $350 or (2) $1,050. * These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind.

Requirement c. What is

JoyceJoyce​'s

taxable income for

20182018​?

​(If an input field is not used in the table leave the input​ field(s) empty; do not select a label or enter a​ zero.)

Minus:	Deductions from AGI:
Taxable income

Answer 1

a. Amount of state income taxes Joyce may include as itemized deduction

2017 state income taxes withheld = $1,600

Balance as shown in 2016 return = $120

Total amount of state income taxes to be shown as itemized deduction = $1,600 + $120 = $1,720

b. Allowed itemized deduction for state income taxes

2018 state income taxes withheld = $2,100

Balance as shown in 2017 return = $200

Total allowed itemized deduction for state income taxes = $2,100 + $200 = $2,300

c. Taxable income for 2018

Adjusted Gross Income (AGI)		$51,000
Less: Deductions
Standard deduction		($12,000)
Qualified residence interest	$10,500
State income tax allowed	$2,300	($12,800)
Taxable income		$26,200