Dan has AGI of $50,000 and paid the following taxes during this tax year.
(1) State income tax withholding $ 1,175
(2) State income tax estimated payments 640
(3) Federal income tax withholding 2,975
(4) Social Security tax withheld from wages 1,840
(5) State excise tax on liquor 370
(6) Automobile license (based on the car’s weight) 285
(7) State sales tax paid 405

Calculate how much Dan can deduct for taxes as an itemized deduction this year.

Respuesta :

Answer:

The $1,815 Dan can deduct for taxes as an itemized deduction this year.

Explanation:

The computation of the itemized deduction is shown below:

= State income tax withholding + State income tax estimated payments

= $1,175 + $640

= $1,815

The  Federal income tax withholding,  Social Security tax , and the  State excise tax on liquor is taxable so, we do not deduct these taxes

And, the Automobile license which based on the weight of the car not  based on value. So, this would not be considered

And, we can take either state sales tax or state income tax. So, we take the state income tax in the computation part