I increased my standard deduction (by $1074) on my 2009 return for sales tax that I paid on a new car. This year, on my 2010 return, my tax prep website (same one I used last year) added a $952 income on line 10. I can't figure out why. I didn't itemize last year and did not receive any 1099-G's. Is this a bug with the software? Any ideas?
Thanks
I entered my W-2 and nothing else, it did it on its own. I have a feeling that the software compares the previous year's deduction field. If it doesn't match the standard deduction, it assumes you itemized and adds the state refund as taxable income. But last year was different because of the sales tax deduction on new cars, so the standard deduction could be increased and still not be itemized. I think it's a bug, I didn't catch it till after the fact.
Thanks
I entered my W-2 and nothing else, it did it on its own. I have a feeling that the software compares the previous year's deduction field. If it doesn't match the standard deduction, it assumes you itemized and adds the state refund as taxable income. But last year was different because of the sales tax deduction on new cars, so the standard deduction could be increased and still not be itemized. I think it's a bug, I didn't catch it till after the fact.