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reallaw
New Member

REF: 2017 State Refund Worksheet and it'sFed Form 1040 Info Smart Wksht: Am I to complete Item D which is my 2016 sales tax deduction that I COULD have taken in 2016?

Item D under the "2016 Federal Form 1040 Information SMART Worksheet states "Enter the Deduction for general sales tax that could have been taken in 2016".  In 2015 I used the Sales Tax Deduction and in 2016 I used the State Refund Deduction....TT picked up the amount of my 2016 Refund correctly but TT did not complete the Item D which ask for the possible 2016 Sales Tax deduction that I could have elected to take, if I had wanted to.  I looked on the IRS 2016 Sales Tax Tables and arrived at a correct amount to place into Item D .... However, as it increased our Federal Refund amount by $200 (+-) it made me nervous....so I need to know if I was correct in completing Item D with the amount from the IRS 2016 Sales Tax Table.  Thanks!!

2 Replies
CherylW
Level 3

REF: 2017 State Refund Worksheet and it'sFed Form 1040 Info Smart Wksht: Am I to complete Item D which is my 2016 sales tax deduction that I COULD have taken in 2016?

Turbo Tax tries to recapture the benefit you got in 2016 by taking the state income tax deduction.

If you didn't take the sales tax deduction in 2016, leave line D blank. 

reallaw
New Member

REF: 2017 State Refund Worksheet and it'sFed Form 1040 Info Smart Wksht: Am I to complete Item D which is my 2016 sales tax deduction that I COULD have taken in 2016?

Why would TT ask for the amount of 2016 Sales Tax "that I could have taken" on Item D?  In the "instructions" TT tells why right after the instruction for Item D.   It states: "Why the program is asking for this amount: The program needs this information to properly compute the tax benefit amount. Only the excess of the income tax deduction over the sales tax deduction yielded a tax benefit in 2016. This amount is used in the computation of refigured itemized deductions on line 7 of the worksheet."
 If I complete Item D it reduces my 2017 tax but I do not know why...and I want to be sure. Thanks for your response!!!
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