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Since the repayment is > $3000, you have 2 choices in how your want to handle this
The first option is to take a deduction for the income in the year of repayment on your federal Form 1040, Schedule A, “Other Miscellaneous Deductions”. Repayments over $3,000 aren’t subject to the “2 percent floor” (described above). No adjustment is needed on the state return.
The 2nd option is to claim a credit in the year of repayment on your federal return. Recalculate tax for the year you received the income, but don’t include the income you repaid. The difference in tax – with and without the repaid income – is the amount of your credit. Report this credit on the “total payments” line of your federal return (for the year of repayment) with the reference “I.R.C. 1341.”
ok that's sounds easy.. and #2?
You do NOT amend the 2012 return
you simply recalculate what the tax would have been had she not received the LTD in that year
ok.. i didn't think we would amend the return.. well excellent answer, well worth $30 and I didn't have to leave my office :-)..thanks
You're most welcom
Please feel free to ask for me by name if I can help you in the future.
Just put "for Anne" on the question line
groovy.. thanks again Anne.. I sure will..
Haven't heard that term in a while.........made me smile.....thank you
:).. have a nice day