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July 3, 2023
Question

If I did not owe stated taxes, why would I not receive the full amount deducted due to my error. I forgot to include the AR state tax deduction in the first state return.

  • July 3, 2023
  • 1 reply
  • 0 views
After amending my state taxes, I will only receive 642 from the orginal 2177 deducted. Why did I lose 1535 dollars...

1 reply

July 3, 2023

@antdkpheng - are you stating that you forgot to deduct your AR state taxes from your federal tax return? and then you went and amended your federal tax return for the AR taxes????

 

there is a difference between a 'credit' and a 'deduction;

 

a credit results in a dollar for dollar reduction in your taxes. 

a deduction is only reduced by your marginal tax bracket.  So if you are in the 24% tax bracket and take a $100 deduction, it will only reduce your taxes by $24. 

 

when you deducted $2177 from your amended tax return, that has to be multiplied by your tax bracket to get to the credit.  Looks like you are in the 32% tax bracket.  (without reviewing your return, we can't see what other changes occured so its not exactly 32%).