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Posted by jj3000 on March 15, 2007, 1:28 am
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>> I was doing 2006 tax and found out in 2005 I deducted too
>> much on a certain item should have belongs to 2006
>> deduction. It is simple to work out the extra tax
>> liability and no ambiguity that I can think of.
>>
>> Therefore for 2005 I received slightly too big of a refund,
>> 1040X and 540X was prepared and I am ready to mail it in,
>> with 2 checks for the balance owe.
>>
>> However, the 2005 state tax refund counts as income for my
>> 2006 federal, and a 1099-G to remind you of this amount.
>> But this amount has changed as the result of above mistake.
> No, it hasn't. 2006 is over, so anything that happens now
> won't affect your 2006 return.
>> I have almost completed my 2006 return now and wanting to
>> file it soon, I THINK the right thing to do is go ahead and
>> put in the amended amount as stated in this 540X so the 2006
>> gross income is properly adjusted. Will the IRS or State
>> think I made a mistake and reject my return because they
>> have not received my 1040X and 540X yet, and assume that I
>> didn't report the state tax refund amount in the current
>> 1099-G.
> No, it will be rejected because it's wrong. The payment
> that you're making on the 2005 state amended return will be
> a deduction on your 2007 return.
Thank you for your replies. I don't know why I didn't think
of it this way. That was simple.
Question for 2007,
As I mentioned I will be mailing 2 checks that I now owe
(for 2005 federal and state) along with the 1040X and 540X
respectively.
So when I do the 2007 return next year, Do I have to keep
track of these payments myself and add it into schedule A
the line where it says "state and local tax"? Or will I
get a slip/form that will remind me of this amount.
I ONLY need to keep track the state tax payment caused by
this amendment, is this correct? The federal tax is paid
and that's the end of story?
Thanks!!
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