Taxable Refund and Recovery Calculator

 
Current Tax Year: Taxpayer's Name:

Show Instructions

This calculator is an implementation of Pub 525 Worksheet 2 with footnote limits applied.
Previous year information is entered on the left, current year information is entered on the right.
Values in the fields are not recognized until you tab or click out of the field.
Boxes highlighted in yellow require an entry before the calculation is done.
  1. Enter refund amounts for the current year.
    • Refunds which include estimated payments made in the current tax year will be allocated between the prior and current years per Pub 525.
    • If the filing status was MFJ and is different for the current year, refunds must be shared with the person filed with in the previous year based on who paid the amount deducted. Enter only this taxpayer's amount.
  2. Enter filing information to determine the standard deduction for the previous year.
  3. Enter previous year Schedule A information.
    • If the sales tax amount is not shown on the previous year return printout, use the IRS sales tax calculator to determine the amount.
  4. Resulting taxable amounts are shown for the current year.
  5. If an amount is taxable, you may then test for a possible unused tax credit test.
    • If the tax after non-refundable credits were applied is non-zero, there are none.
    • If there is a refundable Additional Child Tax Credit, taxable income can be increased without affecting the final tax income since it moves up to the non-refundable credits. The amount that can be excluded depends on the tax rate.
    • If there are other credits that you know about, they must be calculated...
    • But, if you don't have access to an electronic version of last year's return, skip this step.
  6. If there was an estimated state tax payment made in the current calendar year for the previous year, a pro-rated portion of the refund is considered a "prepaid" refund and thus must be subtracted from the "4th quarter payment" made in the current calendar year.
Taxability on refund amounts are determined by entries on the previous year return which include:

Filing information for prior tax year ()

Filing Status:
Dependent on another taxpayer's return
Must itemize
TP 65 or older
TP was blind
SP 65 or older
SP was blind
Standard deduction:

Taxable income (1040 line 43)

If Taxable income (1040 line 43) shows 0, enter lines 41 and 42 to calculate a possible negative Taxable income
   1040 line 41:
   1040 line 42:
43. Taxable income (may be negative):

Schedule A information

5a State & Local Income taxes:
5b General Sales taxes:
Other amount used, if refunded:
Total itemized deductions:

State tax paid

(Federal Section > Deductions > Itemized Deductions > Taxes You Paid > Prior Year 4th Quarter...)
4Q estimated state income tax paid in :  ? 
Estimated taxes paid in the 4th quarter could also include other payments made for the previous year, such as:
  • any tax amount due paid when the return was filed, or thereafter in the same year
  • any estimated tax paid with an extension
However, only use the amount that was claimed on the return.

Unused tax credits

Was tax after nonrefundable credits (1040 line 56) zero? Y   N
Original amounts:
   Total credits (1040 line 55):
   Additional child tax credit (1040 line 67):
Modified amounts:
If you have access to the previous tax return software, temporarily reduce the state tax withheld or estimate paid by at least the refund amount and re-record the new amounts:
   Total credits (1040 line 55):

Return information for current tax year ()


Refund amounts

State income tax refund amount:
   Amount allocated to :
   Amount allocated to :


Sales tax refund amount:
Other recoverable amounts:

State tax paid

(Federal Section > Payments & Estimates > State Estimated Payments > ... Paid AFTER 12/31)
4Q estimated state income tax paid in :  ? 
Estimated taxes paid in the 4th quarter could also include other payments made for the previous year, such as:
  • any tax amount due paid when the return was filed, or thereafter in the same year (presumably 0 since there is a refund)
  • any estimated tax paid with an extension

Taxable amounts

Taxable amount of state tax refund:
1040 line 10
(TS Income > State and Local Refunds > Bypass worksheet line).
0
 
Taxable amount of sales tax & other refunds:
1040 line 21
(TS Income > Other Income).
0

Deductible amounts

Prior year 4th quarter estimated payment:
Part of Sched A line 5a
(Federal Section > Deductions & Itemized Deductions > Taxes You Paid > Prior Year 4th Quarter...).
0
Please send corrections and suggestions to jeff@bogarthome.net