 Then and then the state said you paid me 4,000, but I'm going to give you 2,000 back Well, that means that you didn't really pay 4,000 because they refunded 2,000 So what should you do? Should I go back to the prior year tax return and put only 2,000 here? Which is actually the proper amount I paid after the refund was refunded back to me That would be tedious to do or we could do a cashed based system and try to fix it going forward And that's why you might have to include in income the refund that you get in the following period So that's going to be how that that that kind of plays out now Remember that that does get a lot more confusing than you would think at first glance meaning if you got a tax refund Of $2,000 because you paid 4,000 in the prior year Then the question is well if you didn't itemize last year Then you didn't get any benefit and you wouldn't have to include it in income if you did itemize It's still questionable as to whether you've got a benefit From the taxes or how much of a benefit you got because notice that that my standard deduction right here Is is 12,950 So what if my itemized deductions just barely cleared that what if my itemized deductions came out to be like 13,000 or something Then I just barely cleared the 12,940 so even though I got a $4,000 state tax deduction And I was itemizing I really only got maybe $50 of it right because I because the 12,950 I would have gotten any case so it gets messy in terms So that's why the tax software is quite useful to determine If you got a benefit in that case and that's why I would suggest if you are dealing with a new client That had a schedule a in the prior year that it's worthwhile to Data input the prior year tax return in the prior year software even though it might cost more Roll it over so that the software can help you out with some of those rollover situations Like the refund situation now a similar thing could happen for The other taxes like the like if you have the sales tax Then you might have to include it in other income like down here If you've got a refund a situation for the other taxes that you paid But that's a little bit more unusual of a situation now You also might think well that would lead people possibly To try to like you could try to say if I had a lot of income this year And my tax bracket is going to be higher you could you know people may say well I'm going to try to withhold a lot This year so that so that my it lowers my income this year And I'll be at higher tax brackets this year because my income was higher And then when I get the refund next year, I'll include it in income next year And and because I'm at lower tax brackets next year It'll be a net benefit people can try to play a little manipulative games like that with the cutoff And you got and and the reason That's the problem with a cashed based kind of system. So you got to you got to be You got to be careful whenever that idea of that idea comes into play Well, I'm going to I'm going to prepay all my expenses This year or something sometimes the tax code will limit you in terms of how much you can kind of prepay But it's they have a little bit of a difficulty doing that with the state taxes Because the state tax has a progressive tax system So it's quite likely that people have no idea how much to pay for the taxes Because it's a pay-as-you-go system and a progressive tax system So so there's that all right, and then we also could have included in here You got to be careful of the cutoff kind of situations because If if for example I made estimated tax payments or say I got a refund From my state taxes last year that I rolled over roll over Or into the current year because I'm a Schedule C business Then then that is something that will typically be included in the taxes as well So let's take a look at that So if I had my estimated tax payments, so now I'm not having payments Necessarily withheld from the W2 although I still have those But what if I need to make estimated tax payments as well Which are often done with like a Schedule C business if there was an over payment applied from 2021 And you apply it then to the taxes Let's say it was another 1,000 Then that is going to be included in here as well. So now my state taxes went up to 5,000 So so that's something you've got to you've got to kind of be aware of As well if you're not a W2 employee or if you have the kind of cutoff situation between When you paid the tax and what year it should be applied to Also, if I made a payment in the current year for taxes That were for 2021 for prior year taxes, but I paid them in 2022 That may be included in the Schedule A because again, they're tied to generally a cash based system when you paid them Not an accrual based system when the tax year That's being applied to So for example, if you paid with 2021 state tax return A thousand dollars, let's say Then that was applied to tax year 2021 But you paid it in 2022. So it increased my amount here by 6,000 by a thousand again to 6,000 So it's on it's basically generally on kind of a cash based system And again, if you're using tax software, it will usually help you to pick that stuff up But then you want to kind of double check it if you're looking at this number And if it's you want to say, how is the system calculating? That if it's coming from the Sales the the the Taxes your income taxes you paid for the state Then it would be easy if it just came from the W2, but you also want to think about that cutoff Kind of stuff. Did I have a refund last year? Did I owe money last year if I owe money in 2021 and I paid it In 2021 then I I paid for 2021 in 2022 when I filed the 2021 tax return by april 15th 2022 Then that might be included in here as well and you want to get that that kind of cutoff problem Situated so then you can have the personal property taxes This is often with like the dmv Like vehicle tax and whatnot and you've got to make sure that you take into consideration the the deductible part Of the value of it So I'll just say 160 and pull that on over So that's going to be important. It's usually going to be a relatively small of course In comparison to the property tax and the state taxes, but could still be relevant worth picking up, of course