Tell us about your refund

[MobiusX11]

Every time that I start from them beginning, it already has information for Refunds received for state/local tax returns. It has an amount of $53. When I click edit, it says total refund received in 2023 and it says $53. Then it says total of all your payments withholding and it has a different amount. Underneath that, it says tax year of refund (usually 2022) and it says 2022. On the top it says Tell us about your refund. Under that it says if you received more than one refund, we'll help you enter them at one time. Why does it say $53 for 2023 if I haven't filed my taxes for 2023 yet? Total of your payments withholding says a different amount. Where is all of this information even coming from? Why does it mention 2022? I did my taxes with turbo tax. How can I find out if the information already there is even accurate? I don't see $53 for 2023. I have different amounts on the top left in green that say how much I will get from federal and state but it's not the amount mentioned here. Total of all your payments and withholding says $1,329. Why is this even here also? I did receive a 1099G form but that was for unemployment compensation which I already filed also. However, it mentions nothing about these 2 different amounts.

1. How do I know from my 1040 from last year if I have to file this $53 or not? How do I check what I received last year? 2. I believe someone mentioned I have to file this if it was itemized last year or something like that. How do I check on the 1040 if it was itemized or something? 3. What happens if I file this $53 and $1,329 but it's not necessary to? Does this mean I am paying for taxes on something I am not supposed to and I will get money back? If I don't file it and I am supposed to then I will owe money back right? Is there a penalty for filing this and I'm not supposed to? Turbotax is the one who keeps bringing this up every time I clear everything and start from the beginning. I just want to do this correctly and not have to pay some tax specialist $150 when I can do it on my own for less than half of the price of that.

[KrisD15]

The refund for your 2022 state tax return was received in 2023 which is why it says 53 for 2023.

Total of your Payments & Withholding is the amount of state tax that was withheld from your income in 2022. 

If you used the Standard Deduction (most people do) when you filed your 2022 tax return, the 2022 state refund you received in 2023 is not taxable.

If you Itemized Deductions, the state refund may be taxable or partially taxable. 

Why? When you Itemize Deductions, you get to claim the state tax you paid that year. If you then get some of that state tax that you claimed returned to you as a state refund (the next year) you might need to claim that as income. 

So, if you claimed 10,000 in State Tax on your 2022 Federal Return as a deduction, but the state refunds 2,000 back to you, you now have to claim that 2,000 (or part of it) as income. 

1. Look at your 2022 State tax return, did you get a refund? Was it $53? Did you get a 1099-G from the state reporting the refund? Does your state list your 1099-G online? Can you look at your bank statements for a direct deposit from the state of $53?

2. Look at your 2022 Federal return, does it include Schedule A or on your 1040 line 12 is the Standard Deduction amount for your filing status listed? (The standard amounts are listed in the column).  If the Standard Deduction is listed, you needn't claim the state refund. 

3. Yes, if you claim the 53 refund, and you did not itemize on your 2022 Federal tax return, you would be claiming taxable income that you shouldn't be. I'm guess that 1,329 is the amount of withholding you had which is not anything you would claim. No, claiming the refund would not result in you getting money back. 

In 2022, you would have needed over $12,000 in deductions (Medical expenses, mortgage interest, state taxes) to have Itemized. If you didn't, the refund most likely does not need to be reported. 

It will be the same next year, so please make note to whether you use the Standard Deduction or Itemize this year in order to address a state refund you might receive this year. 

You can view your prior year return in TurboTax under "Your Tax Returns and Documents"

How to find last year's return in TurboTax

[MobiusX11]

1. I am looking on form 8453: Declaration for Electronic Filing and it says $53 on line 5 on Refund. I don't know of this is the total amount including federal and state or only state. I do not remember what I got last year.  I do not remember if I go a 1099G last year. I don't know where this will show on 2022 Tax Return since when I downloaded the file it shows 2022 Federal Tax Return which includes Form 1040, Form 8453, and Form 500. I know I got a 1099G this year which I already put this information on my taxes.  I do not know if I used Standard Deduction or Itemized Deductions.

2. On my 1040 form from last year on line 12 it says Standard deduction or itemized deductions (from Schedule A) = $12,950.  You said, " If the Standard Deduction is listed, you needn't claim the state refund. " I don't usually see people use the word needn't. Are you saying I do not need to claim this $53 on my taxes?

3. The Refunds Received for State/Local Tax Returns that was keeps getting added to my taxes every time I clear everything so I can start all over, shows as $53. When I click on edit it says state or locality and under that it says total refund received in 2023= $53. Under that it says, Total of all your payments and withholding= $1,329. Under that it says Tax Year of Refund (Usually 2022)= 2022. Under that it says What if I didn't get a 1099G. Again, I don't know if I got a 1099G last year. I also do not know where to check that on my tax return for 2022.

So I am still not sure if I should or should not file this $53 on my tax return this year. Why is turbotax even showing me this if it's not supposed to? If I file the $53 and I am not supposed to, what will be the consequences? Will I have to pay some penalty fees or any negative consequences? What if I am supposed to file it and I don't, will there be any negative consequences? If I am unsure whether to file it or not then wouldn't it be safer to just file it to make sure everything is good? By filing this $53 dollars, it means that I am paying for taxes on this for less than $53? I rather pay that much then have to pay a lot more by doing my taxes with a professional. Also those so called tax specialists somehow always end up getting less on my tax return than turbotax does. How can I see right now if I am using Standard Deduction or Itemize this year and for last year?

[LindaS5247]

The general rule of thumb is: 

If you didn’t deduct state and local income taxes last year, you don’t need to pay taxes on your state and local tax refund this year. For instance, if you didn’t itemize your deductions last year and instead you took the Standard Deduction, then your state tax refund from the previous year is tax-free this year.

If you transferred last year's tax data to this year's return, your state and local refunds are automatically brought over with your other tax info.  So TurboTax brought over your refund from last year and used it to decide if it needed to be reported or not.  That is why you see it.

TurboTax will figure out if it’s taxable or not.

If all three of the following are true, your refund counts 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.

Even when your refund is taxable, it may not be the entire amount. It depends on how much the deduction affected your refund or tax bill. 

Just answer the questions about last year’s refund, and we’ll calculate the taxable amount for you.

Click here for information on reporting last year's state or local refund.

Click here for information on the taxability of state refunds.

[bbk4]

Also, if your refund from your state wasn't exactly $53, it may be because you reported tax due on out-of-state purchases, such as in Wisconsin.  If you bought something out of state and didn't pay tax on it, your are required to report that.  If you did report it (most people don't) it will reduce your state refund by that amount but Federal does not look at that.  So, for federal purposes, your state refund is the amount without taking off tax due on out-of state purchases.

[MobiusX11]

" If you didn’t deduct state and local income taxes last year, you don’t need to pay taxes on your state and local tax refund this year. For instance, if you didn’t itemize your deductions last year and instead you took the Standard Deduction, then your state tax refund from the previous year is tax-free this year. "

Where exactly can I find out if I did or didn't deduct state and local income taxes last year? Where exactly can I find out if I didn't itemize my deductions last year and took the Standard Deduction? Where specifically can I find this information from last year's taxes?

I have already mentioned that on the 1040 form it says for Standard deduction or itemized deductions (from Schedule A) Line 12, $12,950.

" If all three of the following are true, your refund counts as taxable income: "

Where exactly do I find all of this information on my tax return for last year?

[MobiusX11]

I didn't buy anything from out of state.

[bbk4]

If you itemized for federal purposes, there should be a Schedule A included in your completed forms from 2022.  Schedule A is the itemized deductions worksheet/form and is necessary if you claimed the itemized deduction.  Schedule A is also where state and local income taxes would be entered if you were to deduct it.  If Schedule A is not included in your completed forms then most likely you did not itemize.  To confirm this, line 12 of form 1040 will have the standard deduction amount entered or some other amount that doesn't correlate with the standard deduction if you itemized.  You noted that you show $12,950 on line 12.  This is the amount for the Standard Deduction for Single or Married Filing Separately.  Hope this helps.