Question

Since the matthews did not itemize for 2018 their state refund is not reported on form 1040

(A) True
(B) False

Answer 1

The correct answer is letter "A": True.

Step-by-step explanation:

Some State income tax refunds may in some cases be taxable income, according to the Internal Revenue Service (IRS). These must be recorded in Form 1040 only in the situation where the taxpayer reported a deduction of the previous year's state and local taxes if they were itemized. Generally, state and local income tax deductions are not specified when standard deductions are claimed.

Answer 2

True

Step-by-step explanation:

Since you have not itemized for 2018, your state refund is not going to be reported on form 1040. This happens when in a hurry, you state your overall income, and you pay the tax for the whole amount. However, you need not worry, as the very next year, you can itemize and quote the state refund. You will be immediately getting the state refund that you owe directly to your bank account. You will have to do nothing else than this.