Strange indeed.... With the $10k limit on SALT and if one had say a $2k State tax refund which they entered on SCH A line 5a along with a $12k Real estate tax. Is there any State Tax assumed to be part of that $10k and therefore all or part of the $2k refund will be taxable on next year's 1040?
In this situation I'm thinkin' it would be better to enter zero on SCH A line 5a and still get the $10k deduction and not have to deal with phantom income on next year's 1040. The withholding that caused the entry in the first place was a 1099. TT propagates the entries onto SCH A. To zero out one has to trace back and zero out the State Tax refund on the 1099 or do an override on SCH A line 5a or maybe tick the box and say SCH A line 5a a is Sales Tax and enter $5.
