Form 1040 Logo - Tax Preparation & Income Tax Planning

BROOKWOOD TAX SERVICE

End the Hassle - Hire a Tax Pro!

404-915-6268

Contact Us      Site Map

Home
Tax Services
Tax News Headlines
Business Tax Tips
Personal Tax Tips
Income Tax Links
Privacy Policy
Fees
About Us
Contact Us
Atlanta Service Resources

 

 

 

 

 

This page last updated on
August 5, 2004

Did You Repay Income You Originally Reported on a Tax Return?
You May be Allowed a Tax Deduction

 

Often taxpayers properly include wages, disability benefits, or other income on their tax return only to find out later that they did not have an unrestricted right to the income. If this happens to you, you’ll have to repay the income, usually in a later year. The IRS will allow a deduction or tax credit, depending on how much you paid back within the tax year.

If the repayment was $3,000 or less, the amount is generally deducted as a miscellaneous itemized deduction on Schedule A, Itemized Deductions. The total of all miscellaneous itemized deductions must exceed 2% of your total adjusted gross income before any tax benefit is derived.

If the repayment was more than $3,000, you have two choices. You can either deduct the total amount you repaid as a miscellaneous itemized deduction not subject to 2%, or you may choose a tax credit for the year of repayment equal to the difference in the tax you paid on the income and the amount you would have paid if the income was not included on your tax return in the prior year.


 

[Home]  [Site Map]  [Contact Us]


brookwoodtax@mindspring.com
Copyright © 2003 Brookwood Tax Service