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State Income Tax Refund Question

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    State Income Tax Refund Question

    Software worksheet calculated a substantially lower amount for a taxable 2011 state income tax refund. This is a first for me as I had always just entered the 1099G amount as taxable, but when checking to see if there was anything I could do discovered the worksheet and a box which stated "click here if you wish to complete the worksheet below." It made quite a difference in the amount of tax due. So I then also checked using the Pub. 525 worksheet and another worksheet in my software instructions for line 10. There is a line on the software worksheet to enter the amount of state and local sales tax deduction they could have taken in 2011, which was about 1/5 of the state income tax deduction taken. My concern is a yellow flag while going through the review process which reads as follows - " An eligible state sales tax deduction amount has been entered on your state income tax refund worksheet. Your taxable state income tax refund may be reduced by this amount if the excess of the state income tax you deducted over the state sales tax you did not deduct is less than the refund of the state income tax deducted. Please verify that the amount below is correct". I come up with the same amount on all worksheets. Assuming I am figuring things right, is it safe to assume that since all figuring methods come out the same there should be no surprises?

    #2
    Happens a lot

    I have had many returns over the years where the taxable portion is different. AMT, sales tax, barely over the Itemized Deduction, etc.
    I would put a favorite quote in here, but it would get me banned from the board.

    Comment


      #3
      If you are referring to the option in the 1040, that is for two years prior. The TP may have credits from 2011 included in the refund amount that shows on the G.
      Look at 2011 state return for credits and filing date.
      Believe nothing you have not personally researched and verified.

      Comment


        #4
        Originally posted by Matt Sova View Post
        I have had many returns over the years where the taxable portion is different. AMT, sales tax, barely over the Itemized Deduction, etc.
        The itemized deduction was barely over the standard in this case.

        Comment


          #5
          Look at last year's return for your answer.
          Believe nothing you have not personally researched and verified.

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