State Income tax refund

Home Fairmark Forum Other Tax Topics State Income tax refund

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #5155
    Lilac
    Participant

    Last year for 2018 income tax I filed joint income taxes and got a $1,600 refund from the state of CA. My husband passed away Dec 2018 so that was his last tax return.
    This year for 2019 I am filing as single. Please someone tell me if I can report half of the amount ($800) as my income or has to be $1600?
    Thank you.

    #5159
    kaneohe
    Participant

    I don’t know about the “half” thing but are you sure it is reportable income? For 2018 tax yr, did you use the standard deduction? If you did, you got no benefit from the increased state tax paid and the refund is not taxable. Or, if you itemized but used sales tax instead of CA income tax, the same applies.

    #5160
    Lilac
    Participant

    We used itemized deductions ( not sales tax) and usually every year State sent us 1099-G and Turbo Tax filed it as income.

    #5165
    kaneohe
    Participant

    Just trying to see if you can get the taxable amount lower……….even tho you filed w/itemized deduction using state income tax, it is possible that filing w/itemized deduction using sales tax instead might not be that much worse.

    Use this calculator to figure the sales tax for your income bracket (10K wide). https://apps.irs.gov/app/stdc/stdc.html
    For income, use your AGI and add all untaxed income (untaxed SS/untaxed pensions/capital loss/etc).

    ………………………

    #5166
    kaneohe
    Participant

    Then use this https://cotaxaide.org/tools/Refund%20Calculator.html
    to calculate the taxable amount of the refund.

    The basic idea is to find out how much you benefited from the itemized state income tax. Eg if your state income tax itemized was 1600 but your state sales tax would have been 1500, TT would have selected state income tax because it gave you a higher deduction. However if the benefit over sales tax was only 100, then your benefit was only 100 and only 100 was taxable.

    #5171
    Lilac
    Participant

    Thank you.

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.