Multiple Choice
For 2009,Godfrey had $5,000 in itemized deductions for state income taxes paid.In 2011,Godfrey's 2009 state income tax return was audited and he was required to pay an additional $4,000 of state income taxes.Godfrey was in the 35% tax bracket in 2009,but his marginal tax bracket in 2011 is 15%.He will itemize his deductions on his 2011 return.
A) The $4,000 payment in 2011 is not deductible.
B) Godfrey must amend his 2009 return.
C) The $4,000 payment in 2011 will reduce his 2011 Federal income tax by $600 ($4,000 * 15%) .
D) Godfrey can reduce his 2011 Federal income tax by $1,400 ($4,000 * 35%) .
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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