Why Does Iowa Tax My Federal Tax Refund?
While it’s annoying, it’s not “double taxation,” and there is a logical explanation for why Iowa makes you claim federal refunds as taxable income.
What is the Tax Benefit Rule?
In tax terminology, the phrase “tax benefit rule” refers to whether or not a refund or recovery received in a future year is taxable. For example, whether or not a state income tax refund is taxable on your federal return depends on the “tax benefit rule.”
Allocating Estimated Payments for Taxable Refund Calculations
When a taxpayer receives a refund of state income taxes, and the taxpayer took a deduction on their federal tax return, and some of the payments made to the state were estimated payments that may have been made in a different calendar year … well, it can require some math to determine the taxable refund and the deductible portion of the estimated payment.
Same-sex Marriage and Paycheck Withholdings – An Unpleasant Surprise on 2014 Tax Returns
Some people in same-sex marriages received an unpleasant surprise on their 2014 tax returns, because of changes in paycheck withholdings.
Sorry, But There Really Isn’t a “Gray Area” for Most Taxpayers to Push
For the average taxpayer, there are few if any gray areas to push on a tax return.
How Non-Residents or Part-Year Residents Report Federal Refunds on Iowa Tax Returns
How non-residents or part-year residents report federal refunds on their Iowa tax return.
Tax Refunds and “Not Owing Tax”, Part 2
NOTE: I wrote this post in 2014, so be aware of its age. —– In Part 2 of this series, I want to explain more about the tax calculation and how getting a tax refund doesn’t necessarily mean you “didn’t owe taxes.” In Part 1, I explained the tax calculation: This is highly simplified but […]
On Tax Refunds and “Not Owing Tax,” Part 1
NOTE: I write this post in 2014, so be aware of its age. —– Let’s talk about tax refunds. No, I’m not going to opine on whether getting a tax refund is a good thing or a bad thing (though that’s a good idea for a future blog post). Instead I want to explain how […]
How to Properly Calculate Taxability of a Federal Refund on Your Iowa Taxes
NOTE: I wrote this post in 2012, so be aware of its age. However, the bones of this post are still valid. —– Residents of Iowa are taxed on their federal tax refunds. This is a primary complaint I hear from clients, especially people who have moved here from other states that don’t engage in this […]