Schedule A (1040) Itemized deductions - State and Local Taxes

[Canonical]

When I was entering Itemized deductions, I entered the State Tax which was withheld on  my W2 but when I finished and about to file taxes, the total State tax has changed. So, Should I put the total State Tax in Schedule A line item 5a or should I put what was withheld on my W2 ?

[AnnetteB6 · Accepted solution]

To insure that your tax return is accurate, you should allow TurboTax to fill in the information on Schedule A based on your entries in the step-by-step method of filling in your return.  That being said, the state tax amount reported on Schedule A line 5a can include more than just the state tax withholdings reported on your W-2.  

If the amount changed after you entered it, TurboTax most likely included an additional amount based on other entries in your return.

The information below is from the TurboTax help content describing what should be included on Schedule A line 5a:

Enter state and local tax withholding on Forms W-2, W-2G, or 1099-R. Also enter state withholding on 1099-DIV, 1099-INT, 1099-G, 1099-MISC, and Schedules K-1. These amounts automatically transfer to the Tax Payments Worksheet and from there to the Tax and Interest Deduction Worksheet. Mandatory contributions to state disability pension funds entered in either box 14 on the W-2 with the applicable code, or box 19 on the W-2 are included in the total on this line. If you made estimated tax payments, paid taxes for a prior tax year, or made any other state and local income tax payments not entered elsewhere, enter those taxes on the Tax Payments Worksheet.
 

[Canonical]

So let me get this right. If one does not withhold State Tax on 1099 but pays in the yearly tax return, that extra State tax = Total State Tax - Withheld State Tax cannot be used to discount itemized deductions (line 5a) ? 

If this is true, people withholding State taxes are paying far less due to higher itemized deductions ?

[SteamTrain]

@Canonical 

State income tax deductions on the Federal Schedule A, will only include state income taxes paid during calendar year 2025. 

Thus if you make a final State Tax due payment now, in 2026, that isn't included in the Sched A , line 5a.

BUT, if you do make a State tax due payment now (in 2026) ...it can be included in the 2026 Federal Schedule A next year...along with any state withholding done during 2026.

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IF you had a final State tax due on your 2024 State tax return, that you filed in 2025...that amount you paid to the state can be included in the Schedule A. line 5a value....but you have to make sure you entered that amount in the Federal section.

[Canonical]

Ok. Will Turbotax software automatically take care of this or Do We have to keep of track of last year State Tax dues and add it to the next year State Tax withholding in next year itemized deductions ?

[SteamTrain]

@Canonical 

Keeping track.....

1) State Withholding?  No...that is automatically included when you enter your W-2 or 1099-??? form into the software, whenever State withholding was done for the particular tax form in question.

2)  A final State tax payment Due....a Maybe to a YES.  Usually, if you remain in the same account in TTX, the software transfers the proper amount from the prior year....BUT...accidents do happen, and you should ALWAYS print a final copy of your Fed and State tax returns to paper and store in a yearly-labelled file folder to use the next year...if needed.  You do need to make sure that state payment was entered each succeeding year.

3)  Also, if a person makes and 4th Quarter estimated tax payment in (say)  January of 2026 for your2025 state taxes, that is not included in the 2025 Federal Schedule A either because it wasn't actually paid in 2025.  I usually make a State 4thQtr estimated payment, but always pay it in December to avoid having to keep track of that too.