If you itemized your deductions last year you did get a deduction for the amount of state taxes paid. Therefore, you have to post the refund to offset that deduction. If you didn't itemize the refund will have no effect on your tax return.
Deductions represent an amount of money that you can subtract from your income before it gets taxed. There are two options for you to claim deductions.
- The Standard Deduction
- For single taxpayers and married individuals filing separately, the standard deduction is $12,950 in 2022.
- For married couples filing jointly is $25,900, and
- For heads of households, the standard deduction is $19,400.
- If you're at least 65 years old or blind, you can claim an additional 2022 standard deduction of $1,400 ($1,750 if using the single or head of household filing status).
- If you're both 65 and blind, the additional deduction amount is doubled.
- Itemized Deductions
- You must maintain or gather records to qualify for this type of deduction.
- Examples of Itemized Deductions include:
- Mortgage Interest
- Property Taxes
- State taxes
- Medical bills
- Charitable contributions
- And a few others
If the Standard deduction is greater than the Itemized deduction, it is to you advantage to take the larger deduction. If you elect to post whatever Itemized deductions you have, TurboTax will determine the one that is to your best advantage.
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