For individuals, taxes are completed based on transactions in the year incurred, such as the year the cash is paid or the year cash is received. For example, if you took a deduction is tax year 2012 and received a refund in 2019, you would leave the deduction in 2012 and claim income separately in 2019. You must claim it as income in the year received because you received a tax benefit on the deduction in a prior year. To enter this in TurboTax Online, follow the following steps:
- Under Federal, click on Wages & Income
- Expand the options in Less Common Income, and click Start/Revisit next to Miscellaneous Income
- Next to Other reportable income, click Start/Revisit
- Answer Yes to the question Any Other Taxable Income
- Enter a description and the corresponding dollar amount and click Continue
- Click Done
You will find this income reported on line 8 of Schedule 1 and carried over onto the 1040 on line 7a. This gets added to all other income on your return and taxed at the ordinary income rate for your filing status and income level.
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