Federal Tax Question
L. A. and Paula file as married taxpayers. In August of this year, they received a $6,120 refund of state income taxes that they paid last year. How much of the refund, if any, must L. A. and Paula include in gross income under the following independent scenarios? Assume the standard deduction last year was $12,600.
#1) Last year L. A. and Paula claimed itemized deductions of $19,650. Their itemized deductions included state income taxes paid of $10,200.