If it says that I got a $3000 renter’s deduction on my state taxes, what does that actually mean?

krisosaurus — Wed, 05 Jun 2019 18:55:22 GMT

Which state? $3000 sounds high.

SweetieJean — Wed, 05 Jun 2019 18:55:23 GMT

Which state? $3000 sounds high.

It means you will receive a $3,000 deduction from your st...

AnthonyC — Wed, 05 Jun 2019 18:55:27 GMT

It means you will receive a $3,000 deduction from your state income when computing your tax liability. Here's an example of how this could impact your state taxes. You have $50,000 in income before the deduction and say your state has a 5% tax rate. Instead of paying taxes on that full $50,000, you get to subtract $3,000 before the 5% tax rate is applied. So, your tax due will be $2,350 ($47,000 * 5%) instead of $2,500 ($50,000 *5%). So, the deduction saved you $150 in tax due.

What it does not mean is that you will get a full $3,000 refund to you. Your actual savings will only be a small portion of the deduction. And, its possible you may not see any impact if you already have other deductions or credits that have reduced your tax due to zero.

topic If it says that I got a $3000 renter’s deduction on my state taxes, what does that actually mean? in Retirement tax questions

If it says that I got a $3000 renter’s deduction on my state taxes, what does that actually mean?

Which state? $3000 sounds high.

Likely Indiana ... but I didn't want to assume http://www.in.gov/dor/5863.htm#renters">http://www.in.gov/dor/5863.htm#renters</a>

It means you will receive a $3,000 deduction from your st...