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TAXABILITY OF NYS REFUNDS IN 2019

  • 1.  TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-15-2019 05:28 PM
    If a taxpayer has real estate taxes of $10,000 in 2018 and state and local income taxes of $10,000 and receives a state refund. What determines if that refund is taxable in 2019?

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    Terry Ehrlich
    CPA
    EHRLICH & COMPANY, CPAs LLP
    Jericho NY
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  • 2.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Bronze Most Valuable Member
    Posted 02-15-2019 06:01 PM
    Hi Terry. Opt in to sales tax since the withholding will not help.
    Refund is then non taxable



    Dominic A. Frandina, CPA
    Certified Public Accountant

    99 Tulip Ave Suite 107
    Floral Park N.Y 11001

    Office: 516-616-0862
    Fax: 516-616-0864


    Original Message


  • 3.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-15-2019 06:11 PM

    Thanks! That confirms what I was thinking.

     

    Regards,

     

    Terry L. Ehrlich, CPA

    Ehrlich & Company CPA's LLP

    125 Jericho Turnpike, Ste. #502

    Jericho, NY 11753

    O: (516) 280-2850 ext. 110

    C: (516) 857-1908

    F: (516) 977-9199

    IRS CIRCULAR 230 DISCLOSURE:
    _____________________________________________
    Treasury Regulations require us to inform you that any Federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.


    CONFIDENTIALITY NOTE:
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    The document(s) accompanying this transmission sheet may contain confidential and/or privileged information. This information is intended for use by the individual or entity named above. If you are not the intended recipient, be aware that any disclosures, copying, distribution or use of the contents of this information is prohibited. If you have received this transmission in error, please notify this office immediately

     




    Original Message


  • 4.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Bronze Most Valuable Member
    Posted 02-15-2019 06:44 PM
    Your very welcome



    Dominic A. Frandina, CPA
    Certified Public Accountant

    99 Tulip Ave Suite 107
    Floral Park N.Y 11001

    Office: 516-616-0862
    Fax: 516-616-0864


    Original Message


  • 5.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-15-2019 07:05 PM
    Won't most tax programs calculate the state refund with no benefit and deem it not taxable for the following year.   The same way it has been treated when clients received no benefit due to the AMT.   



    Original Message


  • 6.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Silver Most Valuable Member
    Posted 02-15-2019 06:18 PM
    That's a good point

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    Marc Lusthaus
    CPA
    ROBERT S. LUSTHAUS, CPA PC
    Plainview NY
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    Original Message


  • 7.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Platinum Most Valuable Member
    Posted 02-16-2019 07:44 AM

    This topic has already been forwarded to the IRS for discussions by the NCCPAP Tax Committee.  We are awaiting a reply from the IRS on the specific handling.

    at our recent NPL meeting, I discussed this topic with a few other practitioner groups.   The general recommendations were to be consistent in your applications.  There are several ways to treat this topic, be it pro rata, simply excluding due to maxing out before SALT entry, etc.

    I'd suggest not making a definitive change that could potentially hurt the taxpayer until guidance is received.

    Steve



    ------------------------------
    Stephen Mankowski
    MANKOWSKI ASSOCIATES, CPA, LLC
    smankowski@mankowskicpa.com
    215-682-7366
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    Original Message


  • 8.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-16-2019 12:05 PM
    A state tax refund is only taxable in the year received to the extent that it reduced the federal tax liability in the year it was deducted.  We all used to have a worksheet to determine taxability and used to write the rev rul # next to the line on the 1040.  I have just asked Ultratax if they are going to make it work on their 2019 projection part of program... 




    Original Message


  • 9.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Bronze Most Valuable Member
    Posted 02-17-2019 01:45 PM
    In our office we have elected to "deduct" sales tax when real estate taxes paid were in excess of $10000 or when combined the real estate and sales tax deduction would equal or exceed $10000. This way there would be no confusion nor calculating that needs to be done since income taxes would not appear on the Schedule A.

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    Lynne Fuentes, CPA
    FUENTES & ANGEL CPAs LLC
    Jericho NY
    516-622-3045
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    Original Message


  • 10.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-17-2019 01:50 PM

    Thanks for your reply. The only issue is when the real estate taxes do not exceed $10,000. In those cases we are deducting the state and local income taxes to get to or exceed the limit

     

    Regards,

     

    Terry L. Ehrlich, CPA

    Ehrlich & Company CPA's LLP

    125 Jericho Turnpike, Ste. #502

    Jericho, NY 11753

    O: (516) 280-2850 ext. 110

    C: (516) 857-1908

    F: (516) 977-9199

    IRS CIRCULAR 230 DISCLOSURE:
    _____________________________________________
    Treasury Regulations require us to inform you that any Federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.


    CONFIDENTIALITY NOTE:
    _____________________________________________
    The document(s) accompanying this transmission sheet may contain confidential and/or privileged information. This information is intended for use by the individual or entity named above. If you are not the intended recipient, be aware that any disclosures, copying, distribution or use of the contents of this information is prohibited. If you have received this transmission in error, please notify this office immediately

     




    Original Message


  • 11.  RE: TAXABILITY OF NYS REFUNDS IN 2019

    Posted 02-18-2019 04:24 PM

    The tax benefit rule make it taxable.   If you include the refund to the extent that you received a deduction.  If the real estate taxes are 6000 and income tax 5000 and taxpayer gets a 3000 refund only 2000 would be taxable. 

     

     

    0add68df-eb25-496c-9f9a-b2a0e0ceb926@namprd04.prod.outlook.com

    Tax Season is here and we are here to help! Our team is ready and we are excited to inform you of a few new changes. Randall Rogg, CPA has added Ankit Kejriwal and Karen Daly as members to the firm.  The firm is now known as Rogg & Kejriwal LLP. Additionally, we have relocated again and have settled into new office space. The new space is still in Carle Place and is only a stone's throw away from the old building. We are now located at 208 Stonehinge Lane.  

     

    Randall Rogg

    Rogg & Kejriwal LLP

    208 Stonehinge Lane

    Carle Place, NY 11514

    Email: CPA@randallrogg.com

    Office: 516-338-6884  Fax: 516-334-3653         

     




    Original Message


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The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.