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.
Some people in same-sex marriages received an unpleasant surprise on their 2014 tax returns, because of changes in paycheck withholdings.
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 their Iowa tax return.
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 I think it covers the basics well enough. Here’s how the tax calculation works: Income [...]