Author Topic: Prepaying taxes and changing tax withholding  (Read 362 times)

shanaling

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Prepaying taxes and changing tax withholding
« on: December 02, 2017, 11:03:38 PM »
Is it weird to prepay next year’s state income tax this year and change next year’s state income tax withholding to 7 allowances (to withhold no or very little state income tax on paycheck)?

Krnten

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Re: Prepaying taxes and changing tax withholding
« Reply #1 on: December 06, 2017, 08:07:54 PM »
I was hoping to do the same thing.  Some questions I have:

1.  We itemize so my state refunds are federally taxed next year.  But I can elect to have my state tax overpayment applied to 2018 state taxes and not refunded.  Will the state overpayment be taxed federally next year even if I don't get a state tax refund?

2.  When I used Turbotax to enter a hypothetical extra state tax payment of 10k for 2017, it didn't affect my federal taxes at all.  So I wonder if there's something I'm missing that Turbotax knows.

MDM

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Re: Prepaying taxes and changing tax withholding
« Reply #2 on: December 07, 2017, 02:26:33 AM »
2.  When I used Turbotax to enter a hypothetical extra state tax payment of 10k for 2017, it didn't affect my federal taxes at all.  So I wonder if there's something I'm missing that Turbotax knows.
How did that change Line 40 of Form 1040 (assuming that is still the "deduction" line in 2017)?