wmartin@brl-vgr.ARPA (Will Martin ) (03/12/84)
I had submitted this earlier, when the 1099G inquiry first came out, but the postnews software on this host wasn't working -- things posted locally never were distributed. So here it is, a bit late to the world... I believe that the reason for being instructed to report (if itemizing deductions) the amount of state tax PAID as opposed to the amount actually OWED, is the situation in some states, as it is here in Missouri -- you have to do your Federal taxes FIRST, in order to transfer certain amounts from specific Federal tax-form lines to your Missouri state tax return. This comes AFTER you have computed your itemized deduction. Therefore, you don't know what state tax you actually owed at the time you figure your Federal taxes. Of course, you could re-do your Federal return AFTER you figure both it and the state, but that then changes your state return, which changes the amount you owe, which causes you to re-figure again, which changes the amount, etc., etc., etc. -- an endless circle, at least until the differences get below a dollar (or a cent, depending on how accurately you figure your taxes...). So it is much simpler for all concerned to just report the amount paid, which is verifiable from the W-2, and figure the difference on the following year's return, as is now done. Now that I think of it, I got a state tax refund (Missouri) last year, but I have never received a 1099G -- are states REQUIRED to send out this form? (I never itemized deductions -- maybe you only get one if you both itemized and got a refund?) Will Martin
john@hp-pcd.UUCP (03/18/84)
I used to work with an engineer who figured his taxes just that way.If he ever gets audited I dont't know who I'd feel sorrier or , him or the IRS. It makes sense to count tax refunds as income. Otherwise you could make a large overpayment on your state estimated taxes in Dec, deduct it from your fed in Jan, and get a state refund in Mar. Theres no such thing... BTW most of the tax guides that I have seen are great if your a business or self employed, but what if you work for someone else? I know that I can deduct books and magazines that pertain to my profession but what about calculators or larger computers that I buy to keep current in my field. Are there any good guides in this area? John Eaton !hplabs!hp-pcd!john