Question

This year Norma paid 1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to 3,100. Which of the following is a true statement if Norma files single with one personal exemption?

A) Norma's total itemized deductions amount to $4,300.
B) Norma's taxable income is reduced by $1,200 due to real estate taxes.
C) Norma's adjusted gross income is lowered by $3,100.
D) Norma's personal exemption has no impact on her itemized deductions.

Answer 1

The true statement for Norma, who is filing single with one personal exemption, is that her total itemized deductions, combining real estate taxes and state income taxes, amount to $4,300. The personal exemption reduces her adjusted gross income and is separate from the itemization process.

Step-by-step explanation:

When Norma files single with one personal exemption on her tax return, considering the itemized deductions she has for real estate taxes and state income taxes, the following statement is true: Norma's total itemized deductions amount to $4,300. Real estate taxes paid by Norma were $1,200, and her other itemized deductions for state income taxes were $3,100. The total of these two amounts gives us her itemized deductions. When filing her taxes, she has the choice to either itemize or take the standard deduction. Her personal exemption reduces her adjusted gross income, but it is separate from her itemized or standard deductions.Therefore, the correct statement is:
A) Norma's total itemized deductions amount to $4,300.

Statements about the impact on her taxable income or adjusted gross income cannot be verified without additional information on her income and the applicable exemption and standard deduction for the specific tax year. It is also true that a personal exemption does not directly impact the total amount of itemized deductions.