Mr. Curtis paid the following taxes: Federal income tax $ 72,250 Federal gift tax 361 Federal employer payroll tax for housekeeper 1,301 Indiana income tax 8,120 Indiana sales tax on consumer goods and services 2,890 Local property tax on: Principal residence 3,980 Vacation home 2,530 Two automobiles 1,300 To what extent (if any) can Mr. Curtis deduct each of these payments

Question

Moyer

Business

27 January, 20:13

Mr. Curtis paid the following taxes: Federal income tax $ 72,250 Federal gift tax 361 Federal employer payroll tax for housekeeper 1,301 Indiana income tax 8,120 Indiana sales tax on consumer goods and services 2,890 Local property tax on: Principal residence 3,980 Vacation home 2,530 Two automobiles 1,300 To what extent (if any) can Mr. Curtis deduct each of these payments

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Ean Vaughan · Answer 1

Mr Curtis can deduct his total property taxes of $ 7,810.00 as well as the Indiana state income tax of $8,120.00, since this exceeds the Indiana state sales tax on consumer goods and services of $2,890.00 paid by Mr Curtis during the year.

Finally, the remaining are not deductible

Explanation:

In other words the following taxes are not deductible:

1. Federal income tax $72,250.00

2. Federal gift tax $361

3. The Federal payroll tax for housekeeper $1,301

4. Indiana sales tax on consumer goods and services$2,890

Lastly the property taxes deductible is computed thus:

Principal residence $3,980.00

Vacation home $2,530.00

Two automobiles $1,300.00

Total $ 7,810.00