Is there any reason to enter my deductions if my tax liability is already zero?

sandy4042 — Thu, 06 Jun 2019 15:16:28 GMT

I usually have itemized my deductions on my federal return but this year due to a drop in income and adjustments to income, I find my calculated income tax is zero with the standard deduction (though still owe self-employment tax). It seems there is no improvement in itemizing over taking the standard, so why should I enter them. Also my State's income tax system does not feed off of any federal deductions.

Should I go ahead and enter my itemized deductions (medical, state and local taxes, charitable) anyway, just for my own record keeping purposes? If Turbotax uses itemized deductions, will my state tax refund increase my gross income on next year's return without considering my tax liability was zero with either the standard or itemized method?

If your tax liability is zero under the standard deductio...

JulieH1 — Thu, 06 Jun 2019 15:16:30 GMT

If your tax liability is zero under the standard deduction you can skip the itemized. If you do not itemize, your state refund will not be taxable next year. See below.

For next year’s state or local tax refund, to figure out if it’s taxable all three of the following must true, to count as taxable income:

You itemized deductions last year, instead of taking the standard deduction.
You claimed state and local income taxes (not general sales taxes).
Claiming the deduction helped you increase your federal refund or lower your tax bill.

topic Is there any reason to enter my deductions if my tax liability is already zero? in State tax filing

Is there any reason to enter my deductions if my tax liability is already zero?

If your tax liability is zero under the standard deductio...