Question
Rodrigo has $5,000 of state income taxes withheld from his salary during 2019. On his 2019 income tax return, Rodrigo properly deducts the $5,000 as
Rodrigo has $5,000 of state income taxes withheld from his salary during 2019. On his 2019 income tax return, Rodrigo properly deducts the $5,000 as state taxes paid. Upon filing his 2019 state tax return on April 15, 2020, he determines that his actual state income tax for 2019 is only $4,100. He receives a $900 refund on May 25, 2020, from the amounts withheld by the state. Which concept(s) or construct(s) dictate(s) that the $900 be included in Rodrigo's 2020 income?
I. Annual accounting period concept
II. Tax benefit rule
Question options:
- Only statement I is correct
- Only statement II is correct.
- Both statements are correct.
- None of the statements are correct.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started