13
QuizMultiple Choice

Tax Credits and Deductions — Quiz

Question 13 • Financial Math

Paul spent $⁢2,000 to install solar panels and paid $⁢1,500 in state income taxes and $⁢1,000 for child and dependent care. Which expenses are eligible for tax deductions?

Answer
A
state income taxes
B
child and dependent care
C
solar panels and child and dependent care
D
solar panels and state income taxes

Explanation

State income taxes can generally be deducted on a federal tax return if the taxpayer itemizes deductions. The solar panel expense may qualify for a tax credit rather than a deduction, while child and dependent care expenses may qualify for a credit, not a deduction. Therefore, the eligible deduction listed is state income taxes.

AI-written and checked against the verified answer.

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