State Income Tax calculations - Crowdsourcing request

[sustythemes]

On the California State tax return, it's sometimes preferrable to itemize even if you don't itemize on the Federal return. In my case this is due to a large Sales Tax event (large purchase). Is there a way to represent this State itemized deduction (or reduced taxable income), instead of the standard deduction in the Case Study Spreadsheet, due to choosing to claim the Sales Tax vs State Income Tax?

[MDM]

On the California State tax return, it's sometimes preferrable to itemize even if you don't itemize on the Federal return. In my case this is due to a large Sales Tax event (large purchase). Is there a way to represent this State itemized deduction (or reduced taxable income), instead of the standard deduction in the Case Study Spreadsheet, due to choosing to claim the Sales Tax vs State Income Tax?

The simplest way, if your itemized deduction is not income-dependent, is to put the itemized amount into cell 'State Tax'!E27 or 'State Tax'!F27 depending on your filing status.  Will that suffice?

Don't know if it is "the most", but California has at least "one of the most" complicated state tax codes, and IIRC they don't even tell people the bracket boundaries until the end of the tax year, so take any result with a few grains of salt until you can verify it.

There are enough residents in CA that I'd be willing to add some useful complexity if you or anyone can describe it, particularly if the description includes Excel formulas. ;)

Alternatively, elect different state legislators (of either party) who will simplify your state tax code. :)

[sustythemes]

Thank you! That'll suffice for my situation since it seems income independent.

[tj]

NARFE always has good information on state taxation of federal pensions and other types of retirement accounts that federal retirees have.

The April 2022 version is contained on page 25-26 of this PDF:  https://issuu.com/narfe/docs/narfe_0422_web

[gbronc]

Truly love this spreadsheet for tax calculations. I assume this feature I'm requesting does not exist, since I've been unable to find it. Having the ability to separate out US Treasury interest income from sources like T-Bills, Savings Bonds, etc. would allow you to exempt that income from State taxes. With the huge increase in interest rates over the last year, this becomes a much more valuable feature since there could be a significant state tax difference. I have workarounds, but would much prefer it to be integrated since California has so many brackets.

Thanks for all the great work on this.

[MDM]

Truly love this spreadsheet for tax calculations. I assume this feature I'm requesting does not exist, since I've been unable to find it. Having the ability to separate out US Treasury interest income from sources like T-Bills, Savings Bonds, etc. would allow you to exempt that income from State taxes. With the huge increase in interest rates over the last year, this becomes a much more valuable feature since there could be a significant state tax difference. I have workarounds, but would much prefer it to be integrated since California has so many brackets.

Thanks for all the great work on this.

You're welcome!

That would be doable, but it also starts down the slippery slope that includes municipal bond interest taxable in your state vs. municipal bond interest not taxable in your state, etc.

As an immediate "integrated workaround," would entering the US Treasury interest as "Rental income" in cell Calculations!B33, then putting =E10 in cell 'State Tax'!M27 give you all the functionality you need?  That wouldn't work if you have actual rental income, but...?

[gbronc]

Yes, I could see that would add some complexity for each state. I may be wrong, but seems like Treasury interest would be a more common scenario.

Unfortunately I do have Rental Income, so your workaround would be a bit trickier (considered using Alimony, which I don't have), but I think I could make it work if cell 'State Tax'!M27 was not protected. Am I missing something on how to enter the =E10?

On a separate California only point, I notice you deduct HSA contributions from Income which is not allowed in California and two other states.

I'm probably grossly oversimplifying, but maybe an income category called "Federal Only income (not included in State)"? The trick is the user has to be sure that income isn't in any other categories. In my case I'd have to combine expected HSA contributions and US Treasury interest to arrive at one number only and not use your HSA contribution cells.

Slippery slopes all over the place for you.

[MDM]

Unfortunately I do have Rental Income, so your workaround would be a bit trickier (considered using Alimony, which I don't have), but I think I could make it work if cell 'State Tax'!M27 was not protected. Am I missing something on how to enter the =E10?

There is no password on the protection.  Caveat user. 

Go to the 'State Tax' tab, then click Review > Unprotect Sheet (or Review > Protect > Unprotect Sheet, if your menu is condensed).  Does that work?