Harlan Lunsford wrote:
- quote -

Unless it's allowing a deduction for the amount paid for the
PRIOR year, that's a circular issue!?!??!?

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D. Stussy wrote:
- quote -

Exception proves the rule, as they say.

Georgia allows deduction for Georgia income tax paid (but
not for any other state) and therefore taxes GA tax refunds.

Cheer$,
Harlan Lunsford, EA n LA

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Arthur L. Rubin wrote:

- quote -

Yep, every state is different. Down here, Georgia demands
same as on federal, while Alabama permits itemizing even if
not on federal. But Alabama IS really different, in that
they allow a deduction for federal tax liability AND FICA
taxes! How bout that? (But no longer for cigaret and
alcoholic beverage taxes.)

Cheer$,
Harlan Lunsford

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Don Coon wrote:

- quote -

State income tax refunds are not taxable at the state income
tax level (but are taxable at the federal level - provided
that you received a benefit from deducting the amount
refunded when it was withheld).

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Harlan Lunsford wrote:
- quote -

I understand your reasoning. I just don't agree, although
the form 1040 instructions support your view. But they
also support that view for MFS taxpayers, even if they
don't have a standard deduction because the spouse
itemizes.

But the states I've filed state returns for allow a separate
election to itemize on the state return independent of the
election on the Federal return, so perhaps there is
justification for your argument.

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Arthur L. Rubin wrote:
- quote -

All depends. (ON what ? ) FActs and Circumstances. (where
have I heard that before? lol)

e.g. - Georgia's standard deduction is 3000; federal 9500.
With ID"s of 8900 and 15% federal bracket one can take a
lower federal refund, but save more Georgia tax thereby.
Thus in this case the state tax deduction on federal
schedule a does not benefit client; thus no includible in
income next year.

Clients are sometimes amazed when we've figured both the
regular away, then I simply check a certain box on Taxwise's
page 2 of 1040 and show them next refunds for both. I call
this "finagling." They are impressed.

Cheer$,
Harlan Lunsford, EA n LA

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Harlan Lunsford <lunstax[at]bellsouth.net> wrote:

- quote -

If TurboTax imported your previous year's return, it will
automatically determine whether the refund is taxable or not
by checking it. That's why you're supposed to use its
worksheet rather than entering the data directly in the 1040
form.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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Harlan Lunsford wrote:

- quote -

It seems to me that it WOULD be taxable in that case,
because one would lose more Federal refund if the refunded
state tax had not been reported on Federal schedule A.

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Phil Marti <philmarti[at]aol.com> wrote:
- quote -

Look again. Both Turbotax and ProSeries have a place for
this.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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Phil Marti wrote:
- quote -

That's what I mentioned above, but actually we should
reconsider, since the only part (up to 100%) that is taxable
is that part which benefited on last year's return.

In cases where one chooses to itemize on the 1040 (and lose
some federal refund accordingly) in order to thereby be able
to itemize on the state return (e.g. Georgia form 500) then
none of it is taxable.

Cheer$,
Harlan Lunsford, EA, way downnnnnn at Columbus, Georgia.

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- quote -

Interview section 2.5 in TT Basic handles that. I find I can
make entries in TT either in the interview side or the tax
form side, and everything will be updated.

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Mark Rigotti, CPA wrote:
- quote -

I'm not familiar with the Michigan returns, but SOME state
payments processed on the tax return are not either refunds
of state taxes or taxable income.

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"Don Coon" <coondw_nospam[at]hotmail_dot_.com> writes:

- quote -

Go to line 10 of the 1040 and input the amount.

Phil Marti
Topeka, KS

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"Don Coon" <coondw_nospam[at]hotmail_dot_.com> wrote:

- quote -

Did you itemize on your 2002 return? If not, the refund is
not taxable.

--
D.F. Manno
dommanno[at]netscape.net
"They that can give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
(Benjamin Franklin)

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Don Coon wrote:

- quote -

Nobody "screwed up'.

simply enter your refund on the appropriate line on page one
of the 1040. I THINK it is line 10.

Cheer$,
Harlan Lunsford, EA n LA

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"Don Coon" <coondw_nospam[at]hotmail_dot_.com> wrote:

- quote -

You are at fault. Starting with Tax year 2003 you should use
the State and Local Income Tax Refund Worksheet, not the
section for entering 1099-Gs.

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- quote -

Either your interpretation or your eyes. If the 1099-G does
indeed correctly document your refund, then the amount is in
box 2 on the 1099-G. On the 1099-G in TurboTax, box 2 says
"For state or local income tax refunds. . . ." It's true
that it does not have a place to enter the amount in that
box, but it has a QuickZoom button that takes you to line 1
of the State Tax Refund Worksheet. Click the QuickZoom
button and enter the information from the 1099-G on line 1
of the worksheet. But first scroll up and read the "Caution"
at the top of the worksheet. The Help for the 1099-G form
explains what to do in more detail.

Bob Sandler
not a tax professional

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"Don Coon" <coondw_nospam[at]hotmail_dot_.com> wrote

- quote -

State tax refunds are only taxable if you itemized your
deductions and that amount included the refunded state tax
paid deduction.

- quote -

It's anyone's guess.

--
Paul A. Thomas, CPA
taxman at negia.net

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coondw_nospam[at]hotmail_dot_.com says...

- quote -

Look for 1099-G Worksheet or a worksheet labled State tax
refund. I use Pro-Series and that is where we put it. You
must have that somewhere.

Cliffp
CA Tax Preparer

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"Don Coon" <coondw_nospam[at]hotmail_dot_.com> wrote:

- quote -

Probably you - Check out line 10 of the federal return. FYI
- Michigan does not report the homestead or renters credit
on a 1099-G so do not forget to report this amount on Line
21 and then as a substraction again on the Michigan return.

--
Regards,
Mark Rigotti

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