@quiltingfool13 wrote:
I entered the state taxes paid into the federal return. I had the federal and state returns checked again. The prior years taxes paid did not make a difference in taxes due for this year. Is this because she is filing with standard deduction? Thanks for your help,.
If the taxpayer paid additional state income tax in 2022 (for any past year) that is an itemized deduction on schedule A. The limit on deducting all state and local taxes (including income and property taxes) is $10,000. If the taxpayer is using the standard deduction, then listing state income taxes paid won't reduce their tax.
If the taxpayer received any state tax refund in 2022 (for any past year) the refund is not taxable if the taxpayer used the standard deduction for that prior year. For example, if the taxpayer got a refund from their 2019 tax return, the refund is not taxable if they used the standard deduction in 2019. If the taxpayer itemized their deductions for that prior year on their federal return and deducted state income taxes paid, then a refund might be taxable now. Since you said she used the standard deduction, I'm not going to take the time to explain how to calculate if a refund is taxable when some itemized, but I can explain it later if you need to know.
