Can i attach a short note to explain a repayment credit?

You do not need to explain your choice of credit over deduction. You have the right to choose the more beneficial method.

 

If the repayment is $3,000 or less, it is a miscellaneous itemized deduction and can longer be deducted. 

 

If the repayment exceeds $3,000, you can only report it in the year you actually repaid the claim.

 

There are a couple of ways to get a tax break by reporting the repayment in the year of repayment:

 

• You'll claim it as a simple deduction from the current year's income. This is the preferred option if you itemize your deductions

 

• Use TurboTax Desktop to figure out the amount of tax you overpaid and take a refundable tax credit

 

• Test both methods and choose the one that results in the lowest tax.

 

Please read this TurboTax Help topic for more information.

Thank you.