Did YouOrSp receive a Form 1099-G for 2006?
The form is used to report unemployment compensation, state tax refunds, and other payments the government made to you.
If you received unemployment compensation, or a state or local tax refund, but did not receive a Form 1099-G, answer Yes anyway, and report those amounts when we ask for them.
Now we'll look at payments you received from your state, including:
These state payments are generally reported to you on Form 1099-G.
Below is a list of the government payments (Form 1099-G) in this return.
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Below is a list of the government payments (Form 1099-G) in this return. It's important to update your imported Form 1099-Gs with your 2005 amounts.
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Because you paid Alternative Minimum Tax (AMT) last year, you were not able to deduct some or all of your state and local taxes on your 2005 return. As a result, some or all of your refund is tax free on this year's return.
To determine the amount of your refund that's tax free, you'll need to go back to your 2005 tax return and calculate the amount of state and local taxes that weren't deductible on your tax return.
If you'd rather not do this calculation, you can include your entire tax refund in your income this year.
| Use my entire $ refund | ||
| Use the taxable refund I'll calculate based on my 2005 refund |
Unfortunately, determining your 2005 sales tax deduction didn't reduce the tax on your refund.
Enter this information from your Form 1099-G.
| Paid by: |
| Payer ID | |
| Unemployment compensation | |
| Repaid unemployment compensation | |
| Tax refunds State or local | |
| ATAA Payments | |
| Taxable grants | |
| Agricultural payments | |
| Trade or business refund |
Enter the number of boxes you checked off on line 38 of your 2005 Form 1040.
2005 Additional deductions (0-4)
Important! This state or local tax refund is from a trade or business. You'll need to enter the taxable amount of this refund with your business income.
If this refund is from a business you report on Schedule C, enter this refund as other income when you complete your Schedule C. If it's related to a farm business, enter it as other income on Schedule F.
Income from this 1099-G will not be used in your return - you can leave it or delete the income in a moment.
We see that you entered a tax year after 2005. The year entered should be 2005 or earlier. Check box 3 of your Form 1099-G and enter the correct information below.
Tax year in box 3
Did you deduct general sales taxes (new in 2004) last year, instead of deducting state and local taxes?
| Yes | ||
| No |
You may be able to reduce the tax you owe on your state refund by determining what your 2005 sales tax deduction would've been had you claimed it.
In general, you're most likely to benefit from this if you made a major purchase in 2005, or if your sales tax rate was high but your state and local income tax rate was low. Learn more
What do you want to do?
| Determine 2005 sales tax deduction (may reduce tax) | ||
| Do not determine 2005 sales tax deduction |
Did your spouse itemize deductions in 2005?
| Yes | ||
| No |
Do any special cases relating to this computation apply to you? (We expect that most people will answer No to this question.)
| Yes | ||
| No |
Enter the employee name and address as shown on this 1099-G.
| First Name | |
| Middle initial | |
| Last Name | |
| Suffix (e.g., Sr.) | |
| Street address | |
| Apt. no. | |
| City or town |
| State | ZIP |
Please enter the employee name as shown on this 1099-G.
| First Name | |
| MI | |
| Last Name | |
| Suffix |
We see that you received an agricultural payment in 2006. Enter this payment manually on Schedule F, line 6a, or Form 4835, line 3a.
What was your filing status for 2005? Click the circle next to the correct choice:
| Single | ||
| Married filing joint return | ||
| Married filing separate returns | ||
| Head of household | ||
| Qualifying widow(er) |
Good news—determining your 2005 sales tax deduction means you owe less tax on last year's refund.
Your filing status is head of household, but you've entered a form for your spouse. If you file as head of household, you must delete your spouse's form.
Because you had a state or local tax refund, we need to ask you a few questions to see if it's taxable income for 2006.
First of all, did you itemize your deductions on your 2005 tax return?
| Yes | ||
| No |
What's reported on this 1099-G?
| Unemployment compensation | ||
| Other government payment |
Your filing status is married filing separately, but you've entered a form for your spouse. If you file separately, you must delete your spouse's form.
We'll use this information from your 2005 tax return to determine whether or not your state income tax refund is taxable.
| 2005 Tax Refund | |
| Filing Status: | |
| Spouse itemized | |
| Special exemptions | |
| State or local income tax deducted: | |
| Sales tax you could have deducted: | |
| Itemized deductions: |
We'll use this information from your 2005 tax return to determine whether or not your state income tax refund is taxable.
| 2005 Tax Refund | |
| Filing Status: | |
| Spouse itemized | |
| Special exemptions | |
| Itemized deductions: |
Enter the missing information. This information is required to calculate your sales tax deduction.
| 2005 Adjusted Gross Income (1040, line 37) | |
| 2005 number of exemptions | |
| 2005 State of residence | |
| 2005 State general sales tax rate, as percent (e.g. 5.5) |
You told us that you had state withholding, but you did not enter the postal abbreviation for the state. Please enter your state here.
| Name of state |
You told us that you had a state tax refund, but you did not enter the postal abbreviation for the state. Please enter your state here.
| Name of state |
You told us that you had unemployment compensation, but you did not enter the postal abbreviation for the state. Please enter your state here.
| Name of state |
We'll use this information from your 2005 tax return to determine whether or not your state income tax refund is taxable.
| 2005 Tax Refund | |
| Filing Status: | |
| Special exemptions | |
| State or local income tax deducted: | |
| Sales tax you could have deducted: | |
| Itemized deductions: |
We'll use this information from your 2005 tax return to determine whether or not your state income tax refund is taxable.
| 2005 Tax Refund | |
| Filing Status: | |
| Special exemptions | |
| Itemized deductions: |
The entry you made on the previous screen was less than zero. Since this number cannot be negative, we have changed your entry to zero. You may want to re-check your manual calculations.
| Payer's name |
| ATAA payments | |
| Taxable grants | |
| Agricultural payments | |
| Federal withholding (box 4) | |
| State withholding | |
| Name of state |
Whose 1099-G?
| TPNameFirst's | ||
| SpNameFirst1's | ||
| Both |
| Payer's name |
| ATAA payments | |
| Taxable grants | |
| Agricultural payments | |
| Federal withholding (box 4) | |
| State withholding | |
| Name of state |
Your Information
Name doesn't match 1099-G. Learn more
Address doesn't match 1099-G. Learn more
Payer's Information
| Payer's ID | ||
| Street address | ||
| City | ||
| State | ||
| ZIP |
We've entered a tax ID number for . If your Form 1099-G shows a different number, you can enter it here.
Payer's ID
Your Information
Name doesn't match 1099-G. Learn more
Payer ID Number
We've entered a tax ID number for the State of Maryland. If your Form 1099-G shows a different number, enter it here.
| Payer ID number |
We've entered a state ID number for Minnesota. If your Form 1099-G shows a different number, you can enter it here.
State ID
Use IRS Publication 525 to determine the taxable amount of your refund.
Taxable amount of refund
Enter your 2005 state and local income tax deduction (1040, Schedule A, line 5).
| 2005 State and local income tax deduction |
We use information from your 2005 tax return to determine your 2005 sales tax deduction. Fill in any missing entries.
| 2005 Adjusted Gross Income (1040, line 38) | |
| 2005 Number of exemptions (1040, line 6) |
| 2005 State of residence (NN) | |
| 2005 state general sales tax rate | |
| Local general sales tax rate, as percent (e.g. 1.5) |
State and local sales tax paid on major purchases in 2005, including:
| Sales tax for major purchases in 2005 |
We use information from your 2005 tax return to determine your 2005 sales tax deduction. Fill in any missing entries.
| 2005 Adjusted Gross Income (1040, line 38) | |
| 2005 Nontaxable income | |
| 2005 Number of exemptions (1040, line 6) |
| 2005 State of residence (NN) | |
| 2005 state general sales tax rate | |
| Local general sales tax rate, as percent (e.g. 1.5) |
State and local sales tax paid on major purchases in 2005, including:
| Sales tax for major purchases in 2005 |
| Payer's name |
| Tax refunds (state or local) | |
| Tax year of refund | |
| Name of state | |
| Trade or business refund |
Whose 1099-G?
| TPNameFirst's | ||
| SpNameFirst1's | ||
| Both |
| Payer's name |
| Tax refunds (state or local) | |
| Tax year of refund | |
| Name of state | |
| Trade or business refund |
Good news! We've determined that your state or local tax refund is tax free.
Because a special case applies to you, we ask that you consult IRS Publication 525 to figure the amount you must include on line 10 of Form 1040, and enter that amount (but not less than zero) here. You may also need to enter an amount on Form 1040, line 21.
Taxable line 10 amount
Because you didn't itemize in 2005, your refund is not taxable.
Because you deducted sales taxes in 2005, your state or local income tax refund is not taxable.
Because you didn't itemize in 2005, your refund is not taxable.
We see that you received a tax refund in 2006. If a tax year appears with the refund
figure, enter that tax year here.
Tax year
| Unemployment compensation | |
| Name of state | |
| Repaid unemployment compensation | |
| Federal withholding (box 4) | |
| State withholding |
| Payer's name |
Whose 1099-G?
| TPNameFirst's | ||
| SpNameFirst1's |
| Unemployment compensation | |
| Name of state | |
| Repaid unemployment compensation | |
| Federal withholding (box 4) | |
| State withholding |
| Payer's name |
We've determined that you cannot file Form 1040EZ and will need to complete a Form 1040A or 1040.
Click Upgrade Now to purchase and download the full version of TaxCut, which supports additional forms to help you complete your taxes. The data you've entered so far will be automatically transferred to the new version. Select from TaxCut Standard, Deluxe, or Premium editions. Each version of TaxCut includes:
Click Upgrade Now to upgrade.
Items not supported by Form 1040EZ:
| ATAA payment (box 5) | |
| Taxable grants (box 6) | |
| Agricultural payments (box 7) | |
| Trade or business refund (box 8) | |
| Possible taxable refund (box 2) |
If you have more than one government payment to report, enter information about one at a time. Who is this Form 1099-G for?
| TPNameFirst | ||
| SpNameFirst1 | ||
| Both |
If federal or state tax was withheld from the amount you received,
enter the amount(s) here.
| Federal withholding (box 4) | |
| State withholding | |
| Name of state | |
| State ID# |
Enter the address as shown on this 1099-G.
| Street | |
| Apt. | |
| City |
| State | ZIP |
If the IRS adjusted your 2005 tax return, and you updated the import report with the adjustments, you do not need to do anything further with the 2005 information shown.
If you did not import the adjusted return into TaxCut, you'll need to update the imported information so it's consistent with the changes the IRS made to your 2005 return. To do so:
If you amended your 2005 tax return, and you imported the amended return into TaxCut, you do not need to do anything further with the 2005 information shown.
If you did not import the amended return into TaxCut, you'll need to update the imported information so it's consistent with the changes in your amended return. To do so:
If you received other state and local income tax refunds, we'll add them up and compare the total with the difference between your 2005 state and local income and sales tax deductions. If the total is greater than that difference, we'll use the difference in our calculations.
If Box 8 is checked, you need to include in your income any portion of the refund that reduced your tax in the year you deducted the tax. Report the income in the same topic, or the same form, on which you deducted the tax—for example, in the self-employment topic (Schedule C).
You can find out your state and local 2005 general sales tax rates by visiting your state's Web site or by asking at a local store that sells general merchandise.
Make sure you find out the 2005 rate, not the current rate. They might not be the same.
If you didn't receive a 1099-G you can use other records you may have, such as your bank deposit records or statements sent with the funds, to determine the amounts to enter.
Yes, the information you've entered up until the point you upgrade will be saved.
Simply click the Upgrade Now button on the screen. We'll take you to our online store where you can purchase the TaxCut program that best meets your tax situation.
The IRS instructions allow you to limit your taxable state and local income tax refund to the difference between:
Example: In 2005 you chose an $11,000 state income tax deduction over a $10,000 state general sales tax deduction. In 2006 you receive a $2,500 state income tax refund. You include only $1,000 of the refund in your income because the difference between your 2005 state and local income and sales tax deductions is only $1,000.
If you enter your 2005 information, we can apply this rule and may be able to lower your tax as a result.
Click Take Me To... on this screen and then select the Personal Information topic from the list under the Federal heading. Click Next on that screen to reach the Filing Status screen.
You'll need to make the change directly on the form itself, rather than in the Interview.
Click Show Form and then Whole Form (or just Whole Form if the form is showing at the bottom of the screen).
Select the check box marked Yourself.
To get back to the Interview after making the change on the form, click the Interview button above the form.
Click the Next button on this screen and follow the directions on the next screen to delete the form.
Look at your 2005 Schedule A, line 5. If you have an amount on line 5 and box b for general sales taxes is checked, you deducted general sales taxes and should answer Yes to this question. If box a for income tax is checked, answer No.
If you itemized deductions, some or all of the refund will be included in your taxable income. If you took the standard deduction, the refund won't be included in your taxable income.
If you moved in 2005, you'll need to use 2005 IRS Publication 600 to figure your 2005 sales tax deduction. You can access 2005 IRS Publication 600 at http://www.taxcut.com/tc/2004/pubs/files/p600.htm.
If you each had a 2005 state tax refund, you'll need to calculate the taxable portion of your 2005 refunds separately. Refer to the Help menu and follow the instructions for line 10 of Form 1040 to calculate the taxable portion of each spouse's refund.
Once you've determined the taxable amounts (if any), follow these steps to complete the topic:
Once you've entered the taxpayer's amount, repeat steps 1 through 5 to enter the spouse's refund.
Use other records you may have, such as your bank deposit records or statements sent with the funds.
If you took the standard deduction the year you overpaid your state or local taxes, the refund won't be taxable.
If you itemized in the year of the overpayment, the refund may be taxable. We'll help figure that out later in the Interview.
If you repaid 2006 unemployment benefits in 2006, enter them here so that we can subtract them from your total unemployment compensation. You don't have to include them in income.
If you repaid benefits from another year, don't enter them here. Instead, you can take them as an itemized deduction. We'll help you with that later in our Interview.
However, if the repayment from another year was over $3,000, you have a choice between an itemized deduction in the amount of the repayment or taking a tax credit equal to the extra tax you paid due to the unemployment compensation in the earlier year.
See IRS publication 525, Taxable and Nontaxable Income. Read the "Repayment over $3,000" section for directions on how to compare the itemized deduction against the tax credit. If the credit yields the best tax result, follow the directions to take advantage of the credit.
Although Social Security benefits are payments from the government, we'll ask you about them later. This topic on government payments is only for payments usually reported on Form 1099-G, typically state tax refunds and unemployment compensation.
Welfare payments are tax-exempt, and you don't have to enter them here. This topic is only for payments from the government that may be subject to tax.
Not all government payments are subject to withholding. If there's no withholding on the 1099-G, just leave this screen blank and click Next.
If you think you did have tax withheld and it's not on the 1099-G, contact the issuer for more information.
If you deducted general sales taxes on your 2005 Schedule A, line 5, box b, answer Yes to the question and we won't include the amount on your federal tax return this year.
In that case, please select Both.
ATAA stands for Alternative Trade Adjustment Assistance. Workers who lost jobs due to increased imports or shifts in production out of the United States may be eligible to receive financial assistance. If your 1099-G includes ATAA benefits (generally shown in box 5), record the amount here.
Insert content here
Enter the number on line 6d of your 2005 Form 1040.
This number should include:
Open the Attachments Worksheet from the Forms Menu and make your entry on line 25.
See your 2005 tax return. If your 2005 Form 1040 line 39 matches line 28 of Schedule A, then answer Yes. If not, or if you did not fill out Schedule A, then answer No.
This is line 28 of your 2005 Schedule A.
The name and address entered here need to match exactly what's on your W-2. If it doesn't match, you'll need to change it. For example, if you moved during the year and your W-2 shows your old address (but we display the new address you gave us earlier), check the box that tells us, "Address doesn't match W-2." When we ask you to enter the address on your W-2, enter your old address.
Most importantly, the information entered here must match the information your employer sent to the IRS, which is what's on your W-2.
If you're in the military and There's No Employee Address Entered
If you received a W-2 from the U.S. armed forces that doesn't show an employee address, it's okay to use the base address. If you don't know the base address, you can use the address that we've entered on the screen.
Nontaxable income includes any of these you received in 2005.
Other state tax payments that might be reported on Form 1099-G are taxable grants and agricultural payments.
You receive a special exemption that's added to your standard deduction if you're at least age 65 as of the end of the year, legally blind, or both. The number of special exemptions shown here is 0-4, depending on the number that applied to you and your spouse (if you filed a joint 2005 return). These exemptions are from 2005 Form 1040, line 39a.
If any of the following cases applies, then answer Yes. In this case, we won't be able to calculate the taxable portion of your tax refund. See IRS Publication 525 for help figuring this amount.
The special cases are:
Answer Yes to this question and see Pub. 525 if you meet ALL THREE of the following conditions:
If any of these applies, see IRS Publication 525, Taxable and Nontaxable Income, and answer Yes.
There's no precise rule of thumb for who will benefit from entering 2005 information. However, you might benefit if you: