Deduct tax paid from previous year

[search2see]

Hello,

Every year I have to pay more Federal and states taxes when I file income tax for that year.   For example: in 2020 tax year I paid more Federal & States taxes total $1,000.00.  Can I deduct this amount $1,000 in my 2021 tax  so I will owe less tax in 2021?  I know I have to pay tax on the refund amount but not sure other way around.

Thank You.

[AnnetteB6]

The state income tax that you paid can be entered in your return to be deducted as part of itemized deductions.  However, it will be subject to the $10,000 limit on the total amount of state and local income taxes that can be deducted.

You cannot deduct Federal taxes paid for a prior year on your current year's Federal return.  Some states do allow a deduction for Federal taxes paid.  

To go to the section of the tax return to enter your state balance due amounts paid in 2021, use these steps:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “state balance due paid” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to state balance due paid”
• Click on the blue “Jump to state balance due paid” link, scroll down the page to find the right entry and enter your information

[fanfare]

@search2see 

" I know I have to pay tax on the refund amount "

The reason you have to pay tax is because you deducted it.

If you did not itemize, you did not deduct it.

If you did itemize, do the taxable amount worksheet to find out how much of your state tax refund actually is taxable.

Also,  if you opted for state sales tax instead of state income tax on schedule A, your state refund cannot be  taxable.