After an audit of my 2014 taxes, I needed to repay part of my refund back to STATE. The error did not affect the IRS taxes. However, since the IRS taxes state refunds, can I claim the additional state taxes on this year's (2018) taxes or do I need to file an amended IRS for 2015?
If I can claim on my 2018 taxes, where in Turbo Tax will I submit the updated numbers?
You can claim a state balance due (for any tax year) that was paid during the year as a deduction on your tax return for the year that the balance due was paid.
For example, if you paid a $100 balance due for your 2014 state taxes in 2017, then you would be able to deduct it on your 2017 tax return.
Use the following steps to go to the section of your return to enter the amount that was paid:
In the aforementioned scenario, There are 3 elements to my payment after a state tax audit of prior years.
1) Corrected Tax amount due
2) Penalty $ due &
3) Interest.
Which components can be deducted on my federal return?
Tax only?
Plus Interest or not?
Plus the Penalty $ or not?
Thanks in advance.
John
Also which elements, tax, interest, penalties are deductible for CT state taxes.
Penalties and interest are not deductible. Only the additional state or local tax paid would be allowed as a deduction on your Federal return.
State income taxes paid are not deductible at the state level. The penalties and interest paid are also not deductible on your state return.