Itemize deductions – must I claim state taxes paid

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  • #7982
    Jannie
    Participant

    Got bill (?) from IRS said I owe money. They say my state tax was one amount and what Others have (I’m assuming the state) is a larger amount. Actually I seldom itemize – probably 2 times in 20 yrs. but if I do I never put what I paid to the state in as a deduction because I always send the state more when I do my estimated taxes so – don’t know what to do, so never claim. My Question: If I itemize am I REQUIRED to claim what I paid the the state or was it ok to ignore it?

    The other error is I had QCD and they show it as a RMD.
    Thank you for any assistance.

    #7983
    kaneohe
    Participant

    Why would your tax bill be higher if you took a smaller deduction?
    In a few cases, you are required to deduct the correct amount so that you don’t benefit by deducting less. Probably not in this case unless you are benefiting.

    Did you show the QCD as a QCD? You’re supposed to show it as a distribution, but not a taxable distribution and also supposed to have a note saying QCD near the appropriate line.

    #7988
    Jannie
    Participant

    I file using a software program H & R Block TaxCut or whatever name it is.. Re QCD – Checked my copy of the tax form I e-mailed via the computer program it shows that there is QCD. May I assume the IRS doesn’t believe me? (The difference between the RMD & QCD is reason my tax bill is higher.

    Itemize deduction: why would the IRS care if I didn’t take the amount I paid to the state for taxes in 2018 or is it the estimated I sent – they should be happy.

    I haven’t found the itemized deductions copy yet.

    #7991
    kaneohe
    Participant

    IRS cares that you take the correct “deduction” in a few instances esp. if you have self-employment income, your expenses for SE income are deducted from your gross SE income to determine your EITC. Some folks leave out some of those expenses so their SE income is higher and they get a larger EITC…….earned income tax credit. This is frowned upon. Similarly you can increase your future SS income by doing the same and this is also frowned upon.

    However if you don’t deduct all your state income taxes, I’m not sure that IRS cares,since you are the only one being hurt.

    #7994
    Jannie
    Participant

    I have figured out they’re talking about a 1099-G which may be for refund I received from the State for overpayment of estimated taxes. I did itemize for the yr. prior to the yr they are questioning so perhaps that amount is income for the yr they are questioning even though I didn’t claim the state tax. a. I found that 1099-G is unemployment comp. (not applicable) & refunds. I’m at a loss as to what it is.

    #7995
    kaneohe
    Participant

    1099-G is used as you say for both……so in your case it’s likely for the overpaid state tax. If you got a benefit from the deduction the prior yr, then it’s income the next yr to the extent of the prior benefit.
    If your deduction was less than you paid, part may not be taxable.

    • This reply was modified 11 months, 1 week ago by kaneohe.
    #8001
    kaneohe
    Participant

    google: how to calculate taxable portion of state refund 2019

    check out a link from cotaxaide; also Pub 525 p.26 wksht 2

    don’t know how to post a link here….otherwise I would have.

    #8002
    Jannie
    Participant

    Thank you, I will check it out. I believe the reason I never claim the state tax if I ever itemize is because it seems like the “income” is from money that had already been taxed since it I paid estimated taxes with money from savings. I’ll have to dig up the return & see the numbers on the form – I may have put a number on the wrong line. Thanks for your assistance will check out the pub.

    #8004
    Jannie
    Participant

    I got it now – Went back to computer copy what was sent – when I entered info. computer program automatically transferred state tax amount to itemized deduction. Then I was suppose to put an amount in the following yr. as income.

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