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#3
02-17-2004, 01:15 AM
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 Re: Taxed Twice? Mark wrote: - quote - > Last year my AGI was high enough that $1800 of deductions
Your computation is wrong. Part of your disallowed $1800 is> were disallowed on my Federal return. > This year, I received a $450 state tax refund (from last > year). It appears, from my Schedule A worksheet > calculations, that the full amount of my refund is taxable > on this years Federal return. allocable to taxes. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
02-13-2004, 04:20 AM
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| Re: Taxed Twice? Mark wrote: - quote - > Last year my AGI was high enough that $1800 of deductions
You are SO right, that would NOT be fair.> were disallowed on my Federal return. > This year, I received a $450 state tax refund (from last > year). It appears, from my Schedule A worksheet > calculations, that the full amount of my refund is taxable > on this years Federal return. > It seems to me that this amount is being taxed twice; once > last year because the deduction was limited, and again this > year. I'm not questioning whether or not it's fair; but is > it correct that this could happen? It seems that I could > have saved on Federal taxes by not making such high state > tax payments! However, who said the tax structure IS fair? Now the good news. There is something called the tax benefit rule, and in your case it applies, so see the section on said topic in IRS publication 525 for details. Cheer$, Harlan Lunsford, EA Phenix City, AL << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
02-13-2004, 04:00 AM
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| Re: Taxed Twice? Mark wrote: - quote - > Last year my AGI was high enough that $1800 of deductions
See the worksheet on page 20 of IRS Pub 525. It will help> were disallowed on my Federal return. > This year, I received a $450 state tax refund (from last > year). It appears, from my Schedule A worksheet > calculations, that the full amount of my refund is taxable > on this years Federal return. > It seems to me that this amount is being taxed twice; once > last year because the deduction was limited, and again this > year. I'm not questioning whether or not it's fair; but is > it correct that this could happen? It seems that I could > have saved on Federal taxes by not making such high state > tax payments! you determine how much of a recovery of an itemized deduction has to be included in income in 2003. http://www.irs.gov/pub/irs-pdf/p525.pdf -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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02-13-2004, 03:41 AM
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| Re: Taxed Twice? Mark wrote: - quote - > Last year my AGI was high enough that $1800 of deductions
I haven't checked the code or regulations, but the> were disallowed on my Federal return. > This year, I received a $450 state tax refund (from last > year). It appears, from my Schedule A worksheet > calculations, that the full amount of my refund is taxable > on this years Federal return. instructions are clear: You recalculate your previous year's schedule A with the tax refund subtracted from state tax paid that year. The difference in the final total is the taxable part of the tax refund -- and it IS probably $450. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
02-12-2004, 08:48 AM
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| Taxed Twice? Last year my AGI was high enough that $1800 of deductions were disallowed on my Federal return. This year, I received a $450 state tax refund (from last year). It appears, from my Schedule A worksheet calculations, that the full amount of my refund is taxable on this years Federal return. It seems to me that this amount is being taxed twice; once last year because the deduction was limited, and again this year. I'm not questioning whether or not it's fair; but is it correct that this could happen? It seems that I could have saved on Federal taxes by not making such high state tax payments! << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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