Question

Problem 5-19
Taxes (LO 5.7)

Laura is a single taxpayer living in New Jersey with an adjusted gross income for the 2019 tax year of $35,550. Laura's employer withheld $3,410 in state income tax from her salary. In April of 2019, she pays $550 in additional state taxes for her prior year's tax return. The real estate taxes on her home are $1,800 for 2019, and her personal property taxes, based on the value of the property, amount to $400. Also, she paid $80 for state gasoline taxes for the year.

Complete the taxes section of Schedule A below to report Laura's 2019 deduction for taxes assuming she chooses to deduct state and local income taxes.

If an amount is zero, enter "0". Enter all amounts as positive numbers.

Taxes You Paid

5

State and local taxes

a

State and local income taxes or general sales taxes. You may include either income taxes or general sales taxes on line 5a, but not both. If you elect to include general sales taxes instead of income taxes, check this box . . . . . . . . . . . . . . . . . . . . . ► ◻

5a

b

State and local real estate taxes (see instructions) . . . . . . . . . . .

5b

c

State and local personal property taxes . . . . . . . . . . . . . . . . . . .

5c

d

Add lines 5a through 5c . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5d

e

Enter the smaller of line 5d and $10,000 ($5,000 if married filing separately) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5e

6

Other taxes. List type and amount ► _ _ _ _ _ _ _ _ _ _ _ _ _ _

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

6

7

Add lines 5e and 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Answer 1

5a. State and local income taxes or general sales taxes = $3960(this includes $3410 tax withheld by the employer and the additional $550 paid by her for previous year tax return, this amount does not include any general sales tax as she doesn't have such liability in the said year 2019).

b. State and local real estate taxes = $1800 (paid by her for year 2019 for her home)

c. State and local personal property taxes = $400 (paid by her for year 2019, this amount of tax is based on valuation of her property)

d. Sum of lines 5a through c = $6160 ( Add:5a+b+c)

e. $6160 ( being the smaller of $10000 and the value at 5d)

6a. State gasoline tax = $80

7. $6240 ( Sum of value at 5e and 6a, that is sum of all kind of taxes paid by her for the said year).

Summary Note: Laura paid a total sum of $6240 during the year for different tax liabilities arised on her.

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