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From: wall@fortune.UUCP (Jim Wall)
Newsgroups: net.taxes
Subject: Deducting State Taxes from the Feds
Message-ID: <5858@fortune.UUCP>
Date: Wed, 5-Feb-86 12:03:58 EST
Article-I.D.: fortune.5858
Posted: Wed Feb  5 12:03:58 1986
Date-Received: Tue, 11-Feb-86 06:41:09 EST
Organization: Fortune Systems, Redwood City, CA
Lines: 21


   I hope this is the way that I think, or else I'm out
another $700.  In '83 on my itemized deductions, I dedcuted the
State taxes that I actually paid, not the amount witheld. This
means that out of $3k witheld, I only deducted the $1.5 owed.
So as  see it, I have just paid Federal taxes on the remaining
$1.5K.

   So, in '84 I did not claim the $1.5 refund from the State as
income, or else I would pay Federal taxes on it again. I just got 
a letter that says that they are upset that I did not claim it.

    Should I have deducted the entire witheld ammount in '83, and
then claim the refund amount as income in '84?  I think I am 
still O.K. on this, but I would like to know if anyone else has
been caught up in this and knows the real story.

					Thanks,   Jim

				Jim Wall
				...amd!fortune!wall