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nontopcpa
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Joined: 06 Feb 2011
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Posts: 12

Posted: 12 Feb 2011 at 12:48 \| IP Logged

I have a question that I dont get it.

I am studying regulation and I dont understand if the tax return is taxable or not. I mean i dont get what they mean. I am having lack of english problem. I got the sentence that says if the person did not intemized prior year then it is not taxable. I am totally confused tax return and tax refund thing. are these two words same thing or not. Thanks ..

BF_CPA
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Joined: 06 Feb 2011
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Posts: 57

Posted: 12 Feb 2011 at 13:47 \| IP Logged

If I am understanding you correctly... I believe the answer to your question is that if you itemize then your refund you received from your previous year state return is taxable income for your current year federal taxes.

For example, if someone is filling out there 2010 federal return (1040) and they itemize they will report their state refund from 2009 as taxable income. If taxpayer uses standard deduction then state refund is not taxable.

I hope this helps.

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nontopcpa
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Joined: 06 Feb 2011
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Posted: 12 Feb 2011 at 16:03 \| IP Logged

Thanks a lot. I did help :)

cpaexamtutoring
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Joined: 07 Oct 2010
Location: United States
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Posts: 93

Posted: 24 Feb 2011 at 22:22 \| IP Logged

[QUOTE=nontopcpa]

I have a question that I dont get it.

A state tax refund is only taxable if the taxpayer itemized in the prior year. Many of my students ( even the ones who speak perfect English) have trouble with that concept..

CPAexamTutoring

Darius Patel

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