I recently received a letter from the North Carolina Dept of revenue saying that I owe taxes for FY 2002. I sent them a copy of a transcript of my Federal 2002 taxes which showed a much lower amount of income than what NC dept of revenue shows. I thought state income taxes always went by what the IRS shows for income. What should I do next? I believe the state somehow made an error.
2007-10-06 06:31:27 · 7 answers · asked by Zoggin 2 in Business & Finance ➔ Taxes ➔ United States
State taxable income is often higher than federal for various reasons (i.e. 401K contributions are not taxable to the fed but are often taxable to the state). Also, some types of income may be taxable to the state but not the fed, and vice versa (for example interest on savings bonds are taxable to the federal but often not taxable to the state).
2007-10-06 10:37:18 · answer #1 · answered by Dee 4 · 1⤊ 0⤋
The State income should match what is reported to the IRS so there apparently is an error in what has been reported to either the federal or the state if the two don't match. Assuming that the Federal is correct, contact the NC Dept of Revenue at the phone number in the letter you received. Depending on where you live there may be a DoR office in your town where you can go sit down and talk with someone who can help you. I just moved from NC and the DoR office in our town was closed earlier this year. It will be a big help if you still have your copy of the 2002 return with all of your W-2' 1099's, etc.
2007-10-06 15:43:49 · answer #2 · answered by BigDog507 5 · 0⤊ 0⤋
State and federal income don't always match, since they each have their own rules. Did you have a high amount of money going into tax-free or tax-deferred items for federal? Those might have been taxable for state. It's also possible of course that NC made an error, but is possible that you did have a lot more income subject to tax at state level than at federal. The state doesn't usually just go by federal.
2007-10-06 19:55:01 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
States will go the the IRS system to see what they have on file, and compare it with what you filed for the state taxes. Do you have anything from the 2002 1040 you filed? Call the number on the letter the state sent you. Make sure they are for real. Then, find out what the statute of limitations is for them coming so late for as claim. Them ask what all the other income is that they have on you. Did you forget you worked for some body under the table, and they then reported you anyways? Or did somebody (a friend) use your SSN to go to work?
2007-10-06 13:45:33 · answer #4 · answered by Nifty Bill 7 · 0⤊ 1⤋
State tax returns and Federal Tax returns are two separate things. The federal does not have some of the things you have to report to the state.
Have the State send you a transcript just like the one IRS sent you. Have them proof their findings.
2007-10-06 20:43:00 · answer #5 · answered by Ms. Angel.. 7 · 0⤊ 0⤋
I would double check your records and be ready to be contacted. You probably will be notified later by the state of NC by a letter. I'm sure they are checking you out.
2007-10-07 09:44:03 · answer #6 · answered by Gary 5 · 0⤊ 0⤋
Contact Ronnie Deutch she has saved tax payers millions.
2007-10-06 16:35:28 · answer #7 · answered by David G 3 · 0⤊ 3⤋