Question
This year Mary received a $325 refund of state income taxes that she deducted on her tax return last year. Mary included a total of
This year Mary received a $325 refund of state income taxes that she deducted on her tax return last year. Mary included a total of $7,850 of state income taxes when she itemized deductions last year. What amount of the refund, if any, should Mary include in her gross income this year?
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$325 is included if itemized deductions exceeded the standard deduction by $325.
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$325 is included because itemized deductions exceeded the standard deduction.
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None of the choices are correct - refunds of state income taxes are not included in gross income.
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$325 is included even if Mary claimed the standard deduction.
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$325 is included because Mary itemized her deductions last year.
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-0078025792
