Question

Archie Hamilton is 45 years old and single. Archie had wage income of $55,000. He also had gambling winnings of $1,000. He is not sure if he should itemize or take the standard deduction. Archie paid the following: $5,200 qualifying home mortgage interest. $9,507 for real estate taxes. $5,040 for state income taxes withheld in 2019. Unreimbursed doctor and dentist bills in the amount of $7,000. Unreimbursed prescription drugs for $14. Vitamins for $120. A statement received from his church showing donations made throughout the year totaling $1,200. Receipts for donations of furniture and clothing in good, used condition to Goodwill. The total estimated fair market value is $100. Tax preparation fee of $315 for his 2018 tax return. $50 paid in 2019 on his 2018 balance due state income tax return. $45 investment expense $250 in gambling losses 11. What is the total amount of state income and real estate taxes deductible on Archie's Form 1040, Schedule A

Answer 1

$5,000

Step-by-step explanation:

Even though Archie's state income and real estate property taxes are much higher, $9,507 + $5,040 = $14,547, his deductions are capped to only $5,000 per year (he is single) or $10,000 if he was married filing jointly.

The Tax Cuts and Jobs Act limited the amount that you can deduct from state taxes. Before 2018 the deductions were not limited to a certain amount.

Answer 2

$10,000

Step-by-step explanation:

Given information:

Archie Hamilton

1. paid $9,507 for real estates taxes.
2. paid $5,040 for state income taxes withheld in 2019

From the information above, it can be referred that;

deductions are allowed up to $10,000 for a combination of State income taxes and Real estate taxes as imposed by the U.S Internal Revenue Service.

In our scenario, the total amount of State income and Real estate taxes deductible on Archie's Form 1040, Schedule A is $10,000 for the year.