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From: markb@sdcrdcf.UUCP (Mark Biggar)
Newsgroups: net.taxes
Subject: Re: Deducting State Taxes from the Feds
Message-ID: <2622@sdcrdcf.UUCP>
Date: Tue, 11-Feb-86 19:47:43 EST
Article-I.D.: sdcrdcf.2622
Posted: Tue Feb 11 19:47:43 1986
Date-Received: Fri, 14-Feb-86 02:24:29 EST
References: <5858@fortune.UUCP>
Reply-To: markb@sdcrdcf.UUCP (Mark Biggar)
Organization: System Development Corporation R&D, Santa Monica
Lines: 30

In article <5858@fortune.UUCP> wall@fortune.UUCP (Jim Wall) writes:
>
>   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.
>

I did exactly the same thing, except it was for 82 and 83. All I had to
do was write a letter to the IRS explaining what I had done and inclosed
enough of my 82 1040 and my 82 state form to document it and they
declared it a wash (I owe them nothing, they owe me nothing).

If they insist that you pay the extra tax for 84, be sure you file an
ammended return for 83 deducting the full amnount, thus increasing the
return form your 83 taxes (they will have to send you a checK).

Mark Biggar
{allegra,burdvax,cbosgd,hplabs,ihnp4,akgua,sdcsvax}!sdcrdcf!markb