Which of the following can be used as credit for federal income tax liabilities? a

Accounting Dec 04, 2020

Which of the following can be used as credit for federal income tax liabilities?

a. Social security tax withheld in excess of $8239.8 if they work for only one employer in a year

b. Overpayment of state income taxes

c. Overpayment of federal income tax from prior year

d. Overpayment of state SDI

Expert Solution

a. Incorrect: Credit can be taken of excess social security tax in case of multiple employers. In case of single employer, refund for excess and corrected form w-2 should be asked for.

b. Incorrect : Federal and state income taxes are separate and thus state state tax canot be used for payment owed towards federal income tax.

C. Correct : Overpayment of prior year tax can be either be applied to next year's estimated tax liability or for refund.

d. Incorrect : Federal & State taxes are separate.

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