Perhaps it is my amateur standing, but I am a bit puzzled by
your post.

Did you enter the entire over-withheld state tax amount on
Schedule A rather than the actual state tax due? If so,
why?

If you report the actual state tax due, it might very well
eliminate the AMT factor. And the refund of your state
overpayment will not be taxable income for 2005.

[Note to my tax professional friends: In the past, I have
learned the hard way to refrain from commenting on specific
tax matters. Every once in a while -- such as this time --
I cannot resist. I am certain that if I am out of line, you
will not hesitate to (justifiably) shoot me down once again.
Bear in mind that, living in Florida, I do not have intimate
knowledge of state income taxes]

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"Cherrybounce" <chdavi15[at]hotmail.com> wrote:

- quote -

Did you happen to notice that your bottom line tax doesn't
change when you removed the deduction?? Oh and by the way,
the state tax refund isn't taxable if you got no tax benefit
from it.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Cherrybounce wrote:

- quote -

It's now.. or never.... (song)

It's all or nothing atall. But for 2004, you can choose
either the state income tax deduction or sales tax
deduction. What might the difference in these deductions
affect your tax? check it out.

ChEAr$,
Harlan Lunsford, EA n LA
Mon 21 Feb 2005

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What you propose will not change your total tax. It will
just increase your regular tax to an amount higher than the
AMT. You can't change it now .

Your total taxes will not change next year either because
you don't have to report a refund of tax that did not
decrease your taxes in a prior year. Just face it, because
of the AMT you can no longer take advantage of the State Tax
Deduction. Your taxes are now almost the same as though you
were a renter (because you can stil deduct mortgage
interest which a renter cannot do). ed

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"Cherrybounce" <chdavi15[at]hotmail.com> writes:

- quote -

First, don't look at the AMT. Look at the total tax
liability. If you don't report the tax withheld, there's a
good chance that even though AMT decreases or goes away, the
total amount of tax you have to pay goes UP, not down.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I have income from various sources and sometimes I am not
certain until late in the year what my total income will be.
In 2004 I overwithheld state tax by several thousand
dollars on a job that I do get W-2 income from just to be on
the safe side.

Well, this extra large state income tax amount on my
schedule A seems to be triggering AMT. I realize that also I
will have to pick up the amount of the refund on next years
return. I will be in an even higher tax bracket next year.

Is there some way I cannot include this on my Schedule A, or
only include the amount I should have withheld, even though
it's on a W-2? Or is there anything I can do? Thanks!

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