it was income last year,,,,,and now they are going to tax it again?......jezuz....this is such a ripoff
2007-02-09 16:22:27 · 8 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You do NOT claim last year's federal income tax refund as income in the following year.
If you received a state refund, you have to check if you got a benefit from taking it as an itemized deduction. If on Sch A last year you took a deduction for state income taxes withheld then you got some back, it makes sense that you have to show that as income in the following year.
There is a worksheet in the Instructions to Form 1040 that helps you calculate the amount of a state income tax refund that is income this year because you took it as a deduction in prior years.
2007-02-09 16:29:31 · answer #1 · answered by Nusha 5 · 1⤊ 1⤋
In general, you don't.
If you itemized your deduction on a schedule A last year, then you were able to deduct state taxes withheld, the idea being to deduct state taxes paid. The amount of state taxes that you got a refund on were not paid as taxes, since you got them back. Ergo, you should have been taxed on them, so the IRS makes you claim them as income the next year.
Your federal refund is never ever taxed.
2007-02-09 16:31:16 · answer #2 · answered by Ryan K 2 · 1⤊ 0⤋
If you received a State Tax Refund last year, and you are itemizing your Federal Return the State Refund will be taxable to you this year, because you were given "credit" for all taxes paid last year on an itemization.
Good Luck & Bless
2007-02-09 16:31:45 · answer #3 · answered by Wood Smoke ~ Free2Bme! 6 · 0⤊ 1⤋
Not your federal refund - you're right, that's already taxed.
If you got a state refund, you'd only claim it if you itemized the year before and deducted it, since that would mean that it wasn't taxed yet.
If you got a state refund but didn't itemize last year, you can just ignore it and don't have to report it.
2007-02-09 17:13:10 · answer #4 · answered by Judy 7 · 1⤊ 1⤋
Depending on the state & how much your refund was. I know here in NY, the IRS issues a 1099-g for for you to fill out if you itemized. Crazy, but true. Hope this helps!
Regards,
Erin
2007-02-09 16:43:10 · answer #5 · answered by ? 1 · 0⤊ 0⤋
I think you need to claim that amount also. But you need not pay tax on it as you have already paid last year.
for furthur clarification go through these sites. these taxes are tax filing sites which help you to get benefited by the deductions providing by them.
try these out and good luck
2007-02-09 19:00:51 · answer #6 · answered by Allan H 1 · 0⤊ 1⤋
I sure as hell hope not, or they're gonna hit me for the last 30-some years.
2007-02-09 16:31:16 · answer #7 · answered by Anonymous · 0⤊ 1⤋
Yes...ain't it the shi+s? I think it is ridiculous.
2007-02-09 16:32:35 · answer #8 · answered by Karen 4 · 0⤊ 2⤋