It's bad enough this client is serving in the reserves, works hard and makes little... Now she had to repay an "overpayment" to the government of $738.00 and the only way to recover is to take it on Sch A subj to 2%. That is the only option. Really?
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"I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur Godfrey -
If it is an overpayment she should not have received it so I don't think she can take a deduction for it.Believe nothing you have not personally researched and verified. -
Because it's under $3,000, I think that is your only option, really!Originally posted by Possi View PostComment
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Point is
The point is, though, she did receive it in her 2011 income, and she paid taxes on it. Then in 2012 she had to pay it back. But because of the 2% floor, she can't take it off her 2012 income, and she can't get a tax credit for the taxes she paid on it in 2011.Originally posted by taxea View Post
I'm just sayin' is all....
it stinks."I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money." Arthur GodfreyComment
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Likely no deduction out there
Not knowing the full facts here...however:
A member of my family is in the military which also paid something in error (one tax year) and "took it back" the following tax year. Both the income and the "adjustment" were handled entirely within the payroll section, and the amounts shown on the two W2s accurately reflected both events.
There was never any consideration given to a tax event that would create a potential "deduction" on Schedule A, at least under these circumstances.
Of course, if this client scenario does fit into the true "repayment" category, it is a fact that a $738 repayment can fall through the cracks due to needing to itemize via Schedule A and/or dealing with the 2% cut which applies to the <$3k amount.
Sometimes life is not fair....
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