Products Affected:
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- ProSeries/1040
- ProSeries Basic/1040
Tip: State and Local Income Tax Refund Worksheet, line 15 "2006 allowable itemized deductions, refigured by excluding line 12" computation.
To determine the amount of tax benefit that was produced by the refund (also known as the recovery amount), you must refigure your itemized deductions by reducing the state income tax deduction by the refund. Sometimes reducing the state income tax deduction will bring the amount below the amount of the sales tax deduction. When this is the case, the sales tax amount is used to compute the refigured total itemized deductions.
For example: If your state income deduction for 2006 was $1,400 and there was a refund of $1,000, you might expect that the refigured itemized deductions would be $1,000 less. But if there was a 2006 sales tax amount of $600, the refigured itemized deductions would be only $800 less, the difference between the total deduction of $1,400 and the sales tax amount of $600.