Did you get a state or Local tax refund in 2019??

[chapinreyes]

This is giving me a bit of a difficult time because TurboTax is not knowing how to deal with this situation.

We got Married at the end of 2019.  My wife itemized last year in 2019, But I took the standard deduction.

Since I have been using TurboTax for years, each year it imports the info from the previous year.  When it comes to this question:

====> We both got a refund.  So i answered yes

====> since I took the standard deduction last year, but my wife itemized I just entered her info here.

===> HERE IS TRICKY: I took the standard deduction.  My wife itemized.

===> since i did not enter info for my situation, but only  my wife's, if I answered i itemized

===> in this case TurboTax gets confused because based on the info imported for last year, i thinks i took the standard deduction.

===> continuing 

===> turbo tax confused because i took the standard but I am filling this out since we are entering my wife's info.

===> continuing

====> no boxes checked

===> This section has all the info it imported for my taxes.  But since we are doing this because of the 2018 state refund, for my wife it is starting to make wonder if I am doing this right.

===> However i just answer I took the standard deduction then...

==> the issue is over... but my wife took the standard deduction.

So which one should I answer?  Or how do I proceed in order to make it work with turbotax premier?

[rjs]

In this section, about your state refund, enter only your wife's information. That seems to be what you started to do, which is correct. Just continue that way. When it says "you" or "your" it means your wife. When it asks for information from "your 2018 tax return" enter the information from your wife's 2018 tax return. If it brings up any information that it transferred from your own 2018 tax return, delete it or replace it with the information from your wife's 2018 tax return.

Since you took the standard deduction for 2018, you do not have to enter the amount of your own 2018 state refund at all. Just enter your wife's 2018 state refund. Answer all the questions in this section about her refund and her 2018 tax return.

[chapinreyes]

Ok so just replace all the info there with my wife's info.  But won't this mess up the rest of the my taxes and all other sections since I already had completed it?

[rjs]

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@chapinreyes wrote:

Ok so just replace all the info there with my wife's info.  But won't this mess up the rest of the my taxes and all other sections since I already had completed it?

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No, it won't mess up anything. You're entering information from your (or your wife's) 2018 tax return, not your 2019 tax return. The 2018 information you enter for calculating how much of the 2018 state tax refund is taxable has no effect on anything else in your tax return. It's only used for that one purpose.

[chapinreyes]

[rjs]

Depending on the state, the amount that it's asking for might not be in one place in the previous year's tax return. You have to add up a bunch of different amounts to get the total. Click the blue link that says "What does this include?" It will give you a list of what things to add up. It's basically any state tax payments that you made for 2018. The most common would be state withholding, and possibly state estimated tax payments. Since you're dealing with your wife's refund, and entering only her information, I would enter only her state tax payments for 2018. From some of the screen shots that you posted, it appears that your wife's refund is from California. If so, I think that line 76 on her 2018 Form 540 is probably the amount that you should enter.

This question in TurboTax asking for the "total of all your payments and withholding" is very mysterious. It's not clear why it asks the question. The amount is not needed to calculate how much of the refund is taxable. And, in fact, TurboTax does not appear to use the amount for anything. I tried to get an explanation from TurboTax a few years ago, and never got a satisfactory answer. So don't knock yourself out worrying about getting the total exactly right. It apparently doesn't matter what you enter. It probably doesn't affect anything.

[chapinreyes]

Thank you for the hep!  I'll look at the 540 form, thank you!