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.”
For the average taxpayer, there are few if any gray areas to push on a tax return.
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 […]
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 […]