Question

Karen Baker, a cash basis calendar year taxpayer, paid the following during the year: Social security tax (withheld from wages) $6,120 Personal property taxes (ad valorem) 520 State income tax 5,000 State sales tax 3,800 Cigarette taxes 500 Fine for speeding 250 What itemized deduction may Karen claim for taxes on her return?

a. $5,520
b. $9,820
c. $10,000
d. $15,420
e. None of these

Answer 1

Karen can claim A) $5520 on her tax return

Step-by-step explanation:

IRS allows for state and local income, and property taxes to be claimed back on your taxes. Among other items.

Therefore the Personal property taxes of 520, and the state income tax of 5000 can be claimed back in the tax return. The total is therefore 5520.

According to the IRS, you may not deduct any fines you have to pay for moving violations or other civil infractions such as parking fines or tickets for failing to maintain the vehicle in an roadworthy condition etc.

Therefore the speeding fine can't be claimed.

According to IRS cigarette tax may also not be claimed.

The answer is A) $5520

Answer 2

Answer: a. $5,520

Step-by-step explanation:

She may claim the Personal property taxes (ad valorem) of $520 as well as the State income tax of $5,000.

Adding them up would give,

= $5,000 + $520

= $5,520

The itemized deduction Karen may claim for taxes on her return is $5,520.