Filing Married for the First Time

[MIKEN66]

My wife and I married during 2022 and will be filing Married Filing Jointly for 2022. We each filed separate "single" returns for 2021. I claimed the Standard Deduction and my wife Itemized Deductions. How do we handle questions on the 2022 return regarding 2021, particularly when it comes to the question of the taxability of the state refund and whether "we" itemized or took the standard deduction in 2021. The questions in the return are from the viewpoint of a sole married couple. If Turbo Tax does not deal with this can someone point me to tax filing guidelines from the IRS on this matter?

Thanks

Mike

[VolvoGirl]

TurboTax does not handle this. If you enter more than one state refund, it just adds them together. It does not ask separately for each refund whether you itemized last year. It just asks once after all the refunds have been entered. There is only one State and Local Income Tax Refund Worksheet, so there is no way to do the calculation separately for the taxpayer and spouse. The help for the worksheet even says that a change in marital status from last year is one of the situations it does not handle.

So either.....

If you both itemized deductions last year then add them together and enter it.

If you both took the standard deduction last year add them together and enter it.

If one person took itemized deductions and the other one took the standard deduction then only enter the one that itemized deductions.

[MonikaK1]

You can handle this situation in TurboTax as follows:

If both spouses got separate refunds from the same state in 2022 for tax year 2021, and both claimed taxes paid as itemized deductions, then you can add the amounts of the two refunds together, and separately add together the payments and withholding you had for 2021, and enter them in the two fields provided for TurboTax to determine whether the refund is taxable.

If you try to enter two refunds for the same state and year, you will see this message:

"If both spouses received a refund from this state/locality, just add up the total amount and make one entry. To change your original entry to combine both spouse amounts, just Return to the Summary."

If you received refunds from two different states in 2022 for 2021 taxes, you can make two separate entries.

As VolvoGirl suggested above, if only one of you itemized deductions, then you can just enter that person's refund and taxes paid that were claimed as itemized deductions.

See this TurboTax blog article for more information on this topic.

@MIKEN66 

[VolvoGirl]

And found this IRS pub 525.  See page 25 example 29.......

https://www.irs.gov/pub/irs-pdf/p525.pdf

"You claimed the standard deduction on your 2021 federal income tax return.  In 2022, you received a refund of your 2021 state income tax. Don’t report any of the refund as income because you didn't itemize deductions for 2021."

Which I would think means you don't even have to enter yours.  So just enter her state refund.