I make a table (as an example), just try to make my question clear.
For case 2: if the salary is withheld $7k tax for state, that is exact amount.
Question for case 1: will the $1k refund be taxable in the next year?
Question for case 3: It ends up paying $5k to state for current year, but how about the $93K taxable income? By comparing to case 2 ($90k taxable income). In this case, I still need to pay $7 to state ($2k already paid as tax withholding, and paying another $5 based on tax return form). But for this case, it seems taxable income for federal government is $93k, while case 2 taxable income is only $90k. It seems I need to pay more federal tax for case 3.
Question for another assumption: If SALT limit is only $6k, then I pay same amount of federal tax for all three cases? Total deduction is $26k, and taxable income is $94k?
Thanks.
