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#4
12-22-2003, 10:21 PM
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 Re: state tax refund taxed at this year's rate? ge wrote: - quote - > If a person expected to have substantially lower income next
OOPS - corrected "reducing" -> "increasing"> year, could they overpay this year's state tax, and then pay > the lower marginal rate on the refund on next year's federal > return? No. There is a requirement (can't find a reference, sorry) that you had reasonable expectations of the tax you paid actually being due. And you need to do your math very carefully. What you propose is increasing this year's itemized deductions and increasing next years AGI. As AGI affects many tax details, that is often a losing trade. dick w << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#3
12-22-2003, 09:43 PM
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| Re: state tax refund taxed at this year's rate? "ge" <e_c_l_e_s[at]a-znet.com> wrote: - quote - > If a person expected to have substantially lower income next
Its kind of yes BUT.> year, could they overpay this year's state tax, and then pay > the lower marginal rate on the refund on next year's federal > return? First of all, the IRS could challenge it. It would help to have a projection to justify the payment that you want to make now. Another thing to watch out for is the AMT. If it affects you, the deduction can be wasted. -- <<< Benjamin Yazersky CPA [NJ & NY] > > << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
12-22-2003, 09:42 PM
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| Re: state tax refund taxed at this year's rate? - quote - > If a person expected to have substantially lower income next
Yes, except that the overpay should be big enough, and that> year, could they overpay this year's state tax, and then pay > the lower marginal rate on the refund on next year's federal > return? you are itemizing this year. That person should also consider pre-paying property tax. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
12-22-2003, 08:06 PM
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| Re: state tax refund taxed at this year's rate? - quote - > If a person expected to have substantially lower income next
No. There is a requirement (can't find a reference, sorry)> year, could they overpay this year's state tax, and then pay > the lower marginal rate on the refund on next year's federal > return? that you had reasonable expectations of the tax you paid actually being due. And you need to do your math very carefully. What you propose is reducing this year's itemized deductions to increase next years AGI. As AGI affects many tax details, that is often a losing trade. dick w << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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12-22-2003, 08:06 PM
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| Re: state tax refund taxed at this year's rate? ge <eccles[at]a-znet.com> wrote: - quote - > If a person expected to have substantially lower income next
In theory. If an outrageous amount is overpaid with no> year, could they overpay this year's state tax, and then pay > the lower marginal rate on the refund on next year's federal > return? reasonable justification for having to pay that amount, it could be disallowed. __ Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
12-19-2003, 12:43 PM
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| state tax refund taxed at this year's rate? If a person expected to have substantially lower income next year, could they overpay this year's state tax, and then pay the lower marginal rate on the refund on next year's federal return? TIA, George << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| rate, refund, state, tax, taxed, year |
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