Paid state taxes from previous years in 2017

I paid state taxes from previous years in 2017.  I followed the instructions to claim this under "prior year state or local tax payments".  It was the last thing I filled out in turbo tax and it did not change anything on my federal tax refund.  My federal tax refund stayed the same.  It did reduce how much I owed to my state.  Can anyone tell me why that is?

LindaA
Expert Alumni

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State taxes are deductible only if you itemize deductions (Schedule A). Since they didn't make a difference, perhaps you either claimed the standard deduction or your tax liability was already zero before you entered the state tax payments.

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I double checked and my deductions are itemized.  There is a Schedule A form and that same total is listen on my 1040 and my tax liability is not 0.  Still a little confused as to why that had no impact on my Fed Tax refund.  Did I input it in the wrong place?

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I just went through it again.  The amount is entered correctly on line 7 of the state and local tax deduction worksheet.  That total from line 22 of the state and local tax deduction worksheet is correct on line 5 of my schedule A .  If I change the $2300 to $1 and let turbotax recalculate my federal return of $65 doesn't change at all.  

LindaA
Expert Alumni

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@mloleyCan you preview your 1040  and take a looks at lines 40 - 44 for both of those amounts (first for $2,300 and then for $1)?  

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lines 40, 41 and 45 changed by that amount.  it was 2390 total and changed by 2389 when I changed it to $1.  line 42 did not change, line 44 changed by $667.  My total fed tax was $48,157 married filing jointly.

LindaA
Expert Alumni

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@mloleyJust to verify, you have an amount on line 45 (alternative minimum tax) and your tax on line 63 is $48,517? 

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Yes I do have an amount on line 45 - $375 AMT.  Not sure what that is, I have never looked at that before.  And yes the amount on line 63 is $48,157.   BTW - thank you for all your help!

LindaA
Expert Alumni

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@mloleyI'm happy to help. It seems the alternative minimum tax (AMT) applies to you this year, hence you're not seeing an increase in your refund. For more information, please see the following FAQs:

What is the Alternative Minimum Tax (AMT)?

Why am I getting hit with the AMT?

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Thanks Linda.  I have one last question.  I went back over the last 3 years and haven't had an AMT.  We did have an increase in AGI of about $50,000.  When I first was reading about deducting state taxes paid for previous years an article stated that it should be place in "miscellaneous deductions".  So I first placed the $2300 there.  Until I later figured out that was the wrong place to put it.  After reading the links you shared it does say high miscellaneous deductions is a trigger for AMT.  Could I have accidently triggered that myself by initially placing the $2300 in miscellaneous deductions?  Is there a way to back out that trigger on turbotax or could I start all over(start a new tax return) and see if doing that still triggers the AMT?  Or am I just barking up the wrong tree?

LindaA
Expert Alumni

Get your taxes done using TurboTax

@mloleyClearing and starting over probably wouldn't make a difference. Your income did go up quite a bit and there are other factors that trigger AMT, such as high state tax. Since you paid back taxes in 2017 that may have triggered it.  You could try using the IRS AMT Assistant to double-check the information.