Question

Given the following​ information, would it be better for Illinois resident Salem Marcos to itemize her sales tax or her state income tax on her federal tax​ return?

Federal taxable income $52,100.00
Federal marginal income tax rate 25%
State taxable income $42,810.00
State income tax rate 3%
Total sales tax paid $1,375.80

Assume that Salem has sufficient itemized deductions to choose itemization method over the standard deduction.

Q1- It would be better for Illinois resident Salem Marcos​to:  ​(Select best answer​ below.)

A.Itemize state income tax.
B.No difference between the two.
C.Itemize sales tax.

Answer 1

C.Itemize sales tax.

Step-by-step explanation:

Salem Marcos state taxable income is $42,810.00

State income tax rate is 3%

State income tax = state taxable income * state income tax rate

=$42,810.00 * 3%

=$1,284.30

Total sales tax paid $1,375.80

It would be better to itemize sales tax paid as the amount is higher than state income tax.

Hope this helps!