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This is a question on Georgia Income Taxes. The IRS allows

 
Wendy Reed's Avatar
  • Answered by:Wendy Reed
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Customer Question

This is a question on Georgia Income Taxes.
The IRS allows you to payback Social Security and deduct the net payment (Amount paid back, less current years receipts) on line 28 of Itemized deductions. The Turbo tax program transfers itemized deductions to the state return including the payback.
Since social security was not taxable in Georgia when received is this correct? If not correct where are the regulations that specify this and where and how is it corrected on the return?

These are the Instructions for form 500 from Georgia.
LINES 12a-c Enter itemized deductions from Federal Schedule
A on Line 12a; enter adjustments for income taxes other than Georgia and investment interest expense for the production of
income exempt from Georgia tax on Line 12b. Subtract Line
12b from Line 12a; enter the total on Line 12c.
Leave Lines 11a-c blank if you itemize deductions.
When Federal itemized deductions are reduced because of
high income, the reduced amount should be used as the starting
point to compute Georgia itemized deductions.
If you itemize deductions on your Federal return, or if you are
married filing separate and your spouse itemizes deductions,
you must itemize deductions on your Georgia return. Include a copy of Federal Schedule A with your Georgia return.

Submitted: 1027 days and 14 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Expert:  Wendy Reed replied 1027 days and 13 hours ago.

HelloCustomer

 

I am working on your situation.

 

Are you referring to Repayment of Social Security in excess of $3000 that was included in federal income in a previous year?

Customer replied 1027 days and 13 hours ago.

Yes That is correct.

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Expert:  Wendy Reed replied 1027 days and 13 hours ago.

Although the Georgia Booklet does not give step-by step instructions for computing Georgia itemized deductions (it rather gives vague rules and talks a lot about adjustments to gross income that may be different for GA purposes), you are correct that you cannot deduct an item for GA that was never taxable. You need to recompute your GA itemized deductions and leave out the amount on line 28 that refers to the repayment of SS. If Turbo tax will not support this, you will need to prepare the return by hand or find an override in Turbotax. I would also send in your copy of Federal schedule A (as directed by the instruction booklet) with an explanatory note as to why your Federal itemized deductions are different than GA itemized deductions.

 

Please let me know if you need additional assistance.

Customer replied 1027 days and 12 hours ago.

There are several ways to override information which result in different taxes due to Georgia. I would need to know the correct one.
If I remove the SS payback for the federal itemized it then causes Georgia to use the Standard deduction which may be appropiate but it also says you must itemize Ga if you itemize federal.
If I enter the SS payback as an adjustment directly to line 12b (itemized Deduction adjustments) on Georgia return it reduces the itemized deduction and gives me less tax due.
I would need to know how to verify the correct way.

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Expert:  Wendy Reed replied 1027 days and 12 hours ago.

I see your dilemma here, and I would like to thoroughly research this and get the correct interpretation of the instructions that are satisfactory for the GA dept. of revenue. It may take a little time for me to do this(a couple of hours or so), I hope it is alright if I do not respond immediately.

 

Thank you for your patience.

Customer replied 1027 days and 11 hours ago.

No problem

Accepted Answer

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Expert:  Wendy Reed replied 1027 days and 11 hours ago.

Hello again, The way you are going about this is correct, and you are correct that you MUST itemize for GA if you itemize for federal, even if the GA itemized deductions are less than the GA standard deduction. The adjustment for the repayment does go on line 12b. You either have to make Turbotax force GA itemized deductions, or prepare by hand if you cannot get the software to do this.

 

I did verify this information with GA DOR, and I spoke to Felicia Smith at 1404-417-2395, at the Individual Income Tax problem resolution center.

 

Unfortunately, you are forced to itemize GA, and it will cause you to pay additional tax. You can try taking the standard deduction for federal purposes and seeing what the overall difference would be, but most likely you will come out ahead by itemizing.

 

Please let me know if I can assist you further.

Expert TypeEnrolled Agent
Pos. Feedback: 100.0 %
Accepts: 3037
Answered: 7/29/2009

Experience: 10+ years tax preparation and tax advice.

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Customer replied 1027 days and 10 hours ago.

I am going to do a proforma return with this info to see if I have any further question and then if not I will accept your answer.

Customer replied 1026 days and 17 hours ago.

THANKS

Customer replied 181 days and 9 hours ago.

I have another tax question are you still available?

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Expert:  Wendy Reed replied 181 days and 8 hours ago.

Yes, hello, I am available.

 

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