Rodrigo Has $5,000 of State Income Taxes Withheld from His

question 21

Multiple Choice

Rodrigo has $5,000 of state income taxes withheld from his salary during 2013. On his 2013 income tax return, Rodrigo properly deducts the $5,000 as state taxes paid. Upon filing his 2013 state tax return on April 15, 2014, he determines that his actual State income tax for 2013 is only $4,100. He receives a $900 refund on May 25, 2014 from the amounts withheld by the state. What concepts) , constructs) , or doctrines) dictate that the $900 is included in Rodrigo's 2014 income? I. Annual Accounting Period Concept. II. Tax Benefit Rule.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements are correct.
• D) Neither statement is correct.

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