Anyone else find this fishy?

[MakiSupaStar]

So for the last few years, I've had to claim my state tax return as income. Or I believe I do. I'm getting something like a W2 from the state showing my tax return amount. Is the state really making us claim the extra money they taxed us as income? How is this not double tax? I'm not smart. Can someone explain this to me? Am I missing something? Does this happen in other states?

[Stigs]

Solution: Don't pay taxes!

[N8116B]

Originally Posted by MakiSupaStar

So for the last few years, I've had to claim my state tax return as income. Or I believe I do. I'm getting something like a W2 from the state showing my tax return amount. Is the state really making us claim the extra money they taxed us as income? How is this not double tax? I'm not smart. Can someone explain this to me? Am I missing something? Does this happen in other states?

You mean your state tax refund?

Yes that is income if you had used what you had withheld for state taxes as a deduction on your federal tax return.

Think of it like this.

On your federal taxes you deduct X amount for state taxes. That reduced your tax liability to the feds by X.

X was the amount of state taxes that were withheld as shown on your W2. X is NOT the actual state tax you paid that year on your return.

After finishing up your fed tax return you start on your state tax return and find out you are getting Y back from the state taxes that you had withheld.

That means you should have only reduced you fed taxes by X-Y not X. But the fed allow you to still claim X and then next year consider Y as income.

[WillPlay4Food]

Originally Posted by MakiSupaStar

So for the last few years, I've had to claim my state tax return as income. Or I believe I do. I'm getting something like a W2 from the state showing my tax return amount. Is the state really making us claim the extra money they taxed us as income? How is this not double tax? I'm not smart. Can someone explain this to me? Am I missing something? Does this happen in other states?

The state should've given you a 1099-G form showing your tax refund. If you itemized last year's taxes, then you have to report your state tax refund as income.

Again, you should only have to do this if you itemized your deductions last year and included state income tax as a deduction.

--------------------------

Disclaimer, I am not a tax pro, do not rely on my advice. If you have concerns, see a tax pro.

[MakiSupaStar]

Originally Posted by WillPlay4Food

The state should've given you a 1099-G form showing your tax refund. If you itemized last year's taxes, then you have to report your state tax refund as income.

Again, you should only have to do this if you itemized your deductions last year and included state income tax as a deduction.

--------------------------

Disclaimer, I am not a tax pro, do not rely on my advice. If you have concerns, see a tax pro.

Yeah. I itemized. That's exactly what happened. I get it now. I guess I'm just bitter at the world. Thanks for you response guys. Now everyone get the hell off my lawn.

[PSPookie]

Originally Posted by N8116B

You mean your state tax refund?

Yes that is income if you had used what you had withheld for state taxes as a deduction on your federal tax return.

Think of it like this.

On your federal taxes you deduct X amount for state taxes. That reduced your tax liability to the feds by X.

X was the amount of state taxes that were withheld as shown on your W2. X is NOT the actual state tax you paid that year on your return.

After finishing up your fed tax return you start on your state tax return and find out you are getting Y back from the state taxes that you had withheld.

That means you should have only reduced you fed taxes by X-Y not X. But the fed allow you to still claim X and then next year consider Y as income.

Exactly.

They are taxing you this year for the difference between the amount of tax you claimed you paid to CA last ear and the amount that you actually paid.

In essence they are taxing you on previously untaxed income. They're just a year late on it.

This is only taxable if you itemized for the 2007 return and you claimed your state income tax as a deduction.

[wabbit]

whacky americans

up here in canada they give us our tax refunds in donuts, poutine and boxes of deep-fried moose schlong .. it's not considered income but a gift for just being so darned swell

[Phalex]

Originally Posted by wabbit

deep-fried moose schlong

So what's one of those weigh??

[wabbit]

depends on how much sauerkraut and bacon bits you add to it ..... or did you just mean without all the fixins?

[Phalex]

Well, yeah, but sauerkraut and Bacon huh????? I'd give her a go.

[T.O.Bass]

Originally Posted by wabbit

whacky americans

up here in canada they give us our tax refunds in donuts, poutine and boxes of deep-fried moose schlong .. it's not considered income but a gift for just being so darned swell

And if your yearly income is over $100,000, you get a tax refund of Bryan Adams and Celine Dion cd's for beings such a greedy SOB.

[wabbit]

.. and avril lavagina and let's not forget 'ol what's her name ..... ummm ..... the jagged little pill chick ..... but that's only if you make the BIG bucks .. she hand delivers her newest cd in/and a hummer

read it as you see fit

thread detour? .. check! (or 'cheque' up here in the great white north)

[funkybass4ever]

Time to move to Florida maybe?

[Gard]

...no, but I do find this fishy:

[Phalex]

Originally Posted by Gard

...no, but I do find this fishy:

It could be a Tuna......

[Chad Michael]

I just wish our taxes were higher.

I mean, they (fed govt) work so hard for their wages and they don't waste a cent of it (our tax dollars).

[Fontaine]

Maki caught a fish to