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From: wmartin@brl-vgr.ARPA (Will Martin )
Newsgroups: net.taxes
Subject: 1099G & State Tax Refunds Discussion
Message-ID: <2429@brl-vgr.ARPA>
Date: Mon, 12-Mar-84 13:41:16 EST
Article-I.D.: brl-vgr.2429
Posted: Mon Mar 12 13:41:16 1984
Date-Received: Tue, 13-Mar-84 08:57:22 EST
Organization: Ballistics Research Lab
Lines: 31

I had submitted this earlier, when the 1099G inquiry first came out, but
the postnews software on this host wasn't working -- things posted locally
never were distributed. So here it is, a bit late to the world...

I believe that the reason for being instructed to report (if itemizing
deductions) the amount of state tax PAID as opposed to the amount 
actually OWED, is the situation in some states, as it is here in Missouri --
you have to do your Federal taxes FIRST, in order to transfer certain
amounts from specific Federal tax-form lines to your Missouri state tax
return.  This comes AFTER you have computed your itemized deduction.

Therefore, you don't know what state tax you actually owed at the time you
figure your Federal taxes. Of course, you could re-do your Federal return
AFTER you figure both it and the state, but that then changes your state 
return, which changes the amount you owe, which causes you to re-figure
again, which changes the amount, etc., etc., etc. -- an endless circle,
at least until the differences get below a dollar (or a cent, depending
on how accurately you figure your taxes...).

So it is much simpler for all concerned to just report the amount paid,
which is verifiable from the W-2, and figure the difference on the following
year's return, as is now done.

Now that I think of it, I got a state tax refund (Missouri) last year,
but I have never received a 1099G -- are states REQUIRED to send out this
form? (I never itemized deductions -- maybe you only get one if you both
itemized and got a refund?)

Will Martin