As Lily is completing her 1040 form, what piece of information will she find on a different document rather than on this W-2?

As Lily is completing her 1040 form, what piece of information will she find on a different document rather than on this W-2 ?

A) Gross wages earned

B) Federal income taxes she's already paid

C) State income taxes she's already paid

D) Income earned from her investments

The Correct answer is C) State income taxes she's already paid

As Lily is completing her 1040 form, the information about the state income taxes she's already paid will typically be found on a different document, not on her W-2. This information is typically recorded on her state tax forms, such as the state income tax return or any relevant documents provided by the state tax authority. Lily will need to refer to these state-specific documents to accurately report the state income taxes she has paid during the tax year.

What is State Income Taxes?

State income taxes refer to the taxes imposed by individual states within the United States on the income earned by residents and businesses within that particular state. These taxes are separate from federal income taxes, which are levied by the U.S. federal government.

Each state has the authority to establish its own income tax rates, brackets, deductions, and credits. The rates and rules can vary widely from one state to another. Some states have a progressive tax system, where higher incomes are taxed at higher rates, while others have a flat tax rate that applies to all income levels.