How do I account for a state tax refund from a previous year?

Question

I may get a refund from my state for 2005 after I file an ammended return. How would I account for this on my federal taxes if the refund hits in 2007?

Answer 1

It depends. Did you previously itemize deductions and include on schedule A a deduction for state taxes?

If so, you will have to bascially recognize the refund as income in the year you received it. It sounds like you will physically receive the money in 2007. So, you will be issued a special 1099 from the state, and there is a spot on the first page of form 1040 (line 10) to include the amount.

If you didn't itemize, and only took the standard deduction, there is no effect on your taxes.

Answer 2

IF you itemized and claimed a deduction for state taxes in 2005, the refund is claimed as income in the year you receive the refund. Report the refund on line 10 of your 1040. I don't see a place on the 1040-A or 1040-EZ.

Answer 3

If you previously deducted the estimated state tax that ultimately lead to the refund, and if you got a tax benefit from taking that deduction, you would report the refund as income on your 2007 federal income tax return.

Answer 4

If you itemized your deductions and took state income taxes on the Sched A for 2005, then the refund is taxable in the year you receive it, ie 2007.

Answer 5

you ought to consistently use your cutting-edge cope with at the same time as filing your tax returns. Did you contain a voided sparkling verify for the direct deposit. from time to time even nonetheless you protected your economic company information it will be difficult to ascertain out what the numbers are and IRS can ought to mail the verify extremely. If IRS gave you funds back date then in the adventure that your account became notated as DD they could of instructed you that your DD is wanting to pass out on so and so date. If the CSR became sparkling and presented you a date the DD date is 10 days earlier the date that became given to you. And by technique of ways IRS mail isn't forwarded you ought to document style 8822 replace of cope with with IRS. The submit workplace will deliver the mail decrease back to IRS with with a replace of cope with and then IRS will deliver you a "are you there letter" and also you ought to reply inclusive of your replace of cope with for IRS to re-mail your verify or any mail.