Question

Matt paid the following taxes this year: Real estate taxes on his own residence $3,600 State income taxes 900 Local city income taxes 300 State sales taxes 1,400 What is the maximum amount Matt can deduct as an itemized deduction on his tax return?

Answer 1

$5,300  is the maximum amount Matt can deduct as an itemized deduction on his tax return.

Explanation:

Real estate taxes on his own residence         $3,600

State income taxes                                             1,400

Local city income taxes                                       300

Total itemized deduction                                  $5,300

Sales taxes are not deductible in 2014.

Under the United States tax law, individual taxpayers ' deductions constitute eligible expenses for federal returns of taxation and which reduce their taxable income and which may, if available, be reimbursed in place of a standard deduction.