Question

What is the limitation on deductions for tax paid?

A. $10,000 limitation for real estate taxes paid ($5000 for MFS)

B. $10,000 limit for state and local income taxes paid ($5000 for MFS)

C. $10,000 limitation for the aggregate of all taxes paid $5,000 for MFS)

D. $1,0000 limitation for the aggregate of all taxes paid ($0 for MFS)

Answer 1

Tax law: Tax law is defined as a rule made by the government of the county and imposing that rules on individual, businessman and corporation to collect the revenue. The tax law of one country may be different from other counties. The tax deduction is defined as a deduction in the tax liability of the taxable person by lowering its taxable income. The new Tax Cuts & Jobs Act came into force 2018 tax year. In two ways its limits deductions for taxes paid by an individual. The first one is the 10.000 deduction limitation aggregate for state and local personal property tax, foreign income, war profit and real estate taxes paid to 10,000 ($5,000 for married couple filling separately). Hence the correct option is (C).