2021 Amended Return processed - do I need to amend 2022?

[artalemp]

My parents received a letter from the IRS that income was reported from a 1099R that they did not report.  It seems they lost/didn't receive a statement for an IRA they cashed in.  I am helping them file the amended state return and ran TurboTax for both the federal and state process.  Their income has adjusted by about 20k.  My question is - should they also amend their 2022 taxes since their income was different? Can they claim the taxes they are paying this year on their 2023 taxes?  They are getting older and I'm just trying to keep up.

Thanks for any advice!

[xmasbaby0]

No.   Federal tax paid to the IRS is not deductible on their next federal tax return.   You will not enter anything on their 2023 federal tax return about paying the tax owed for the amended 2021 return.

There are several  states that allow you to enter the federal tax you paid on your state return--Alabama, Iowa. Missouri, Montana, and Oregon.  If you are filing in one of these states watch for the deduction when you prepare their state return.

[rjs]

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@artalemp wrote:

My question is - should they also amend their 2022 taxes since their income was different?

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What income was different? They do not have to amend 2022 because of the change in their 2021 income. Was their 2022 income different from what they reported on their 2022 tax return?

[NCperson]

@artalemp if they paid STATE income tax in 2023 as a result of the 2021 mishap AND they itemize their 2023 tax return, that STATE tax payment is deductible in 2023.  Otherwise, there is no impact for 2022 or 2023. 

[Opus 17]

If they are in a state with income tax, they probably need to file an amended 2021 income tax return as well.

Nothing about this situation requires a change to 2022.

However, if they pay additional tax to their state in 2023 (the year they corrected the federal return) then this tax can be added to their state and local income tax deduction on their upcoming 2023 return.  Taxes are deductible when actually paid, regardless of what year they were for.  Likewise, if they are in one of the states that allows deducting federal taxes on the state return, that would be added to their 2023 tax return, since the taxes were actually paid in 2023.