Lynnette Is a Single Individual Who Receives a Salary of $36,000.During

question 101

Multiple Choice

Lynnette is a single individual who receives a salary of $36,000.During 2013,she has $6,800 withheld for payment of her federal income taxes and $2,900 for her 2013 state income taxes.In 2014,she receives a $450 refund after filing her 2013 federal tax return and a $750 refund after filing her 2013 state tax return.
I
If Lynnette has total itemized deductions of $6,000 on her 2013 federal tax return,she must include the entire $750 refund in her 2014 gross income.
II) If Lynnette uses the standard deduction in filing her 2013 federal income tax return,the $750 refund is not taxable in 2014.

• 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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Definitions:

Entertainment Costs

Expenses incurred for activities related to enjoyment, such as movies, sports events, and concerts.

Net Worth

The difference between a person’s assets (what is owned) and that person’s liabilities (what is owed).

Liabilities

Financial obligations or debts that a company or individual owes to others.

Kilowatt-Hour

A unit of energy equivalent to one kilowatt of power expended for one hour of time, commonly used to measure electricity consumption.