During the current year, George, a salaried taxpayer, paid the following taxes w

Question

During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business: Federal income tax (withheld by employer) $1,500 State income tax (withheld by employer) $1,100 FICA tax (withheld by employer) $700 Real property taxes $300 Federal auto gasoline taxes $200 Federal excise tax on telephone bills $50 What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he elects to deduct state and local income taxes? a $1,150 b $2,000 c $1,100 d $1,400 e None of these choices are correct.

Explanation / Answer

Answer is ad. $1,400

Since he elcts to deduct state and local income taxes, he is not allowed to claim deductions for general sales taxes. He shall be allowed deduction only for State income tax and Real property taxes i.e $1,100 + $300 = $1,400

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