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Posted by Andrew on February 28, 2007, 6:41 pm
Please log in for more thread options R. C. White wrote:
> Hi, Andrew.
>
> I've stayed out of this thread, as you've noticed. But, since you
> asked...
>> (Some people make sure they make the 4th quarter payment in DECEMBER
>> to avoid having to remember this!)
>
> But, but, but... I'm not sure what the question is.
>
> Are we talking about the state income tax estimates, or the federal? And
> are we worried about Quicken's handling of the January estimate? Or
> TurboTax's? Or the IRS's? This January, or last January?
>
> Remember that well over 99% of individual taxpayers are on the cash
> basis and calendar year for tax reporting. (The answers are
> different for accrual basis and fiscal year taxpayers, but there are
> SO few of them.) Also remember that every state has its own laws and
> that some - such as Texas, where I live now - do not have a state
> income tax at all. And there may be some states with income taxes -
> I'm not aware of any - that do not require estimated tax payments. MANY
> taxpayers must deal with multiple states for one or more years. With all
> that out of the way, there are some GENERAL rules, subject
> to many variations.
> On their Form 1040, individuals can deduct state income taxes PAID
> DURING the calendar year. So their 2006 deduction would include
> income taxes paid to ALL states during the calendar year 2006,
> including such taxes: 1. Withheld from compensation, as reported by their
> employer on Form
> W-2 for the calendar year 2006.
> 2. Withheld from interest, dividends or other income, as reported on
> the appropriate forms.
> 3. Paid as estimated taxes DURING 2006, typically including the
> January 2006 payment, but not the January 2007 payment.
> 4. Paid for the January 2007 payment IF it is paid in 2006.
> 5. Paid in April 2006 for the balance of the 2005 tax liability.
> 6. Paid at any time in 2006 for any year, such as on an audit or
> amended return for the 2003 tax year.
>
> Let's not get into the discussion of state income tax refunds. We
> hashed that out more than once in the past and those discussion
> should be in the archives of this newsgroup. (Also, I'm no longer
> qualified to discuss this subject because I've forgotten what I used
> to know about it, and because I never learned the rules that have
> changed since I moved to Texas and retired.)
>
> Federal income tax payments are not deductible on the Federal return,
> of course, except as credits for taxes prepaid. These typically
> include the April, June and September 2006 payments, plus the January
> 2007 payment - but not the January 2006 prepayment, obviously. The
> January payments will be in the "wrong" years, of course, so far as
> Quicken and TurboTax are concerned. If TT imports only 2006
> transactions, it will see the January 2006 prepayment for 2005, but
> not the January 2007 prepayment for 2006. We will need to make the
> appropriate adjustments.
> As always, the taxpayer - not Intuit - is responsible to see that the
> proper amounts are shown on the return.
>
> RC
>
>> Michael Rosen wrote:
>>
>>> But a fourth quarter federal payment made in January would apply to
>>> the 1040 as well.
>>
>> But to be clear again, this is true only if made in the SAME calendar
>> year, I believe. A 4th quarter payment made in January 2007 for t/y
>> 2006 does NOT get reported in t/y 2006 Federal 1040 Sch A. It DOES
>> count for the state t/y 2006 (at least for my state of New York).
>>
>> The 4th quarter payment made in January 2006 for t/y 2005 gets
>> reported on the 1040 for Federal t/y 2006.
>>
>> (Some people make sure they make the 4th quarter payment in DECEMBER
>> to avoid having to remember this!)
>>
>> R.C. - right??
>>
>> --
>> -------------------------------------------------------------
>> Regards -
>>
>> - Andrew
> But, but, but... I'm not sure what the question is.
Ah, good point. When the original statement was made "TTax imported my 2006
payments into the Tax Payments Worksheet. But
it didn't import any payments I made in 2007.", I jumped and was talking
about State Taxes and the fact that the January payment from THIS year could
not be counted on Sch "A" for 2006 Federal Payments. And then it got
complicated!
But I thank you for your post with all sorts of other details that I really
need to sit and think about to digest.
> Let's not get into the discussion of state income tax refunds.
OK - but it's so much fun!
--
-------------------------------------------------------------
Regards -
- Andrew
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