Double-Taxation

SpiceWeasel

SpiceWeasel

Tre Kronor
Getting my taxes all compiled and I just got a 1099-G from Michigan. Turns out, the income tax that was returned to me for over-payment is considered "income". I guess someone really wants that money eh?

Got me to wondering, what are all the other wonderful things our government double-dips on? I paid a sales tax on a private-party purchase of a used car... Georgia makes you pay some ridiculous car tax every year in the guise of "registration". I already paid tax on my 401(k) money before it was deposited, but due to changing jobs and shifting the 401(k).... taxed again!

It's pretty out of control...
 
SpiceWeasel said:
Getting my taxes all compiled and I just got a 1099-G from Michigan. Turns out, the income tax that was returned to me for over-payment is considered "income". I guess someone really wants that money eh?

Got me to wondering, what are all the other wonderful things our government double-dips on? I paid a sales tax on a private-party purchase of a used car... Georgia makes you pay some ridiculous car tax every year in the guise of "registration". I already paid tax on my 401(k) money before it was deposited, but due to changing jobs and shifting the 401(k).... taxed again!

It's pretty out of control...
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You were allowed to write off the state tax on your federal taxes. Now that you got a refund, that amount should have been paid on in federal taxes, since it was not, they'd like their money. It is not double taxation. As has been explained to me.
 
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SpiceWeasel said:
Who determines which tax comes out first? I thought that all of the taxes are computed on the full amount.
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You know, this isn't my strong suit and I'm just parroting what I've been told. How about someone more knowledgeable in taxes chimes in.
 
z987k said:
You know, this isn't my strong suit and I'm just parroting what I've been told. How about someone more knowledgeable in taxes chimes in.
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Learn something new every day. Probably time to put TurboTax away and go with a professional...
 
Refund (or credit) of state or local income taxes.
If you receive a refund of (or credit for) state or local income taxes in a year after the year in which you paid them, you may have to include the refund in income on Form 1040, line 10, in the year you receive it. This includes refunds resulting from taxes that were overwithheld, applied from a prior year return, not figured correctly, or figured again because of an amended return. If you did not itemize your deductions in the previous year, do not include the refund in income. If you deducted the taxes in the previous year, include all or part of the refund on Form 1040, line 10, in the year you receive the refund. For a discussion of how much to include, Recoveries in chapter 12.
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The IRS.gov website has lots of answers just like FAA.gov
 
SpiceWeasel said:
Getting my taxes all compiled and I just got a 1099-G from Michigan. Turns out, the income tax that was returned to me for over-payment is considered "income". I guess someone really wants that money eh?
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Consult a tax professional, but I don't believe it counts as income since you didn't itemize.

Got me to wondering, what are all the other wonderful things our government double-dips on?
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Nothing for personal taxes. Corporations and their shareholders get screwed, though. The corporation pays corporate tax, and then they pay dividends (presumably) to their shareholders who have to pay tax on that same profit again. One more reason to abolish corporate taxes.

I paid a sales tax on a private-party purchase of a used car... Georgia makes you pay some ridiculous car tax every year in the guise of "registration".
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They got rid of that. Now you just pay sales tax up front and something like $35/year for tags.

I already paid tax on my 401(k) money before it was deposited
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No you didn't.

It's pretty out of control...
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Not really.
 
ATN_Pilot said:
Consult a tax professional, but I don't believe it counts as income since you didn't itemize.



Nothing for personal taxes. Corporations and their shareholders get screwed, though. The corporation pays corporate tax, and then they pay dividends (presumably) to their shareholders who have to pay tax on that same profit again. One more reason to abolish corporate taxes.



They got rid of that. Now you just pay sales tax up front and something like $35/year for tags.



No you didn't.



Not really.
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Some of my 401(k) is Roth. So not all of it, but I definitely did.
 
It is very important to consult a Tax Professional before moving retirement accounts, the rules can be rather complex and once money from a 401(k) hits your hands it cannot be undone. with most other retirement accounts you can undo the problem within 60 days, after that you are stuck. The combination of taxes and penalties can make any money spent on a tax professional seem very cheap indeed.
 
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