I’m pretty sure you misunderstood your accountant or there is something else going on here. A refund isn’t income by any definition, you overpaid and they are giving the extra back.
Apparently I don’t earn enough to qualify for that. However I do earn enough to qualify for the 25% tax bracket. Whee!
Not only will this tune be stuck in my head all day now, but my brain will try to finish rewriting the lyrics too. 
Huh? I’ve never claimed the previous year’s refund as income. I’ve been doing my taxes for almost 20 years and have never been audited for it. I’ve never even HEARD of that!
That seems correct to me. Else there’d be a line on the 1040 forms for entering last year’s refund so it could be added when you calculate your adjusted gross income, no? The closest thing I see is on Line 10 of Form 1040 - and that addresses only state and local tax refunds or other offsets when they total more than you paid in state or local taxes.
The bulk of my income comes from a Fellowship, from which no taxes are withheld, and from consulting work, from which no taxes are withheld. I didn’t cry after I calculated my tax burden for this year, but I did have to do some careful budgeting calculations for the first time in my life.
Think about it. You didn’t pay taxes on the first time. You gave it to the IRS with the understanding that it would be for last year’s taxes but you overpaid so you got that part back.
You are sounding like the other people in this thread that seem to think that a refund is some sort of gift from the Feds. In reality, it is the result of bad planning and/or sloppy math on your own part and they are just making a correction.
When you get the money back, it was supposed to be money that you received as income last year but didn’t because you handed it over to the IRS. Now that the situation is corrected, it is taxed.
If that were not the case, you could shelter a huge portion of your income by greatly overestimating your payroll deductions and then receiving a huge refund at the end of the year.
My girlfriend dumped me by letter. Fuck those fascists in the Postal Service.
Of course you paid taxes on it! You’re taxed on GROSS income, not net. They don’t calculate your tax burden subsequent to withholding. They calculate it prior.
I got about the same back this year as I always do, my boyfriend got about 1200 and our roommate got about 1500. We’re pretty happy.
But in the spirit of the OP, damn that IRS…taking my money all year!!! Evil I tell ya!
OK. Let me try this again & maybe a resident CPA can tell me if I’m misunderstanding this. You’re claiming it as income 2x. You claim it the year it actually gets paid to you & with-held from your taxes. It then gets returned to you as a refund & you are required to claim it as income again. Doesn’t that mean you pay income tax on it both times?
Yep, there’s no way you have to declare refunds as income. Think about it: let’s say you make $50,000 a year and pay a flat tax rate of 20%. If you did your withholding exactly right, you’d end up paying $10,000 throughout the year and get no refund. If you withheld too much, say $15,000, you’d get that $5000 back as a refund, but owe no taxes on it because you already paid your $10,000 for the $50,000 you earned. That $5000 is part of the original $50k on which the taxes were paid in full. The fact that you loaned it to the government interest-free for a year doesn’t change your tax obligations.
We get $32.00 back this year and it only cost us $200.00 to have our taxes done. We’re going to blow the refund on dinner at Outback’s, which will put us about $50.00 in the red. And, for another $200.00, we are going to file an amended return for last year—I hope we get another $32.00 back. Is this a great country or what?
That makes no sense.
Suppose John makes $50,000 gross in FY 2003. Also suppose his gross tax rate should be 22%, so he should pay $11,000 in tax. However, his employer withholds $12,000. So he gets a $1000 refund in June 0f 2004.
If the IRS then counts that refund against his 2004 income, of COURSE he’s being taxed twice. He earned the $1000 refund in 2003, and he was taxed on it. His tax owing was caculated based on his gross income of $50,000, of which the $1000 was part. of the $11,000 tax John paid, $220 came out of that thousand bucks. They don’t calculate your income tax based on what you keep after withholding. How the heck would that even work?
Or, uh, it could be 'cause you’re married or have kids. Or because you have a mortgage. Or because you saved a lot of dough in your 401(k). Or because you incurred unexpected expenses that are tax deductible. There’s a lot of reasons you can be owed a refund besides “You’re stupid.”
You’re not serious, right? How can you shelter your income by having it deducted? You’d just be getting back the money you should have been keeping anyway.
This thread proves : Do NOT take your tax advice from a message board
And yet you think we should take your advice about whether or not to take tax advice? :dubious:
You pay Fed tax on a state tax refund. You’ll get a 1099 from the State.
My accountant has had me make a deduction every year for household goldfish aquarium supplies originally allowed under subsection 4.1 of the 1834 Bigworth-Morley Siamese Coastal Trade Act. It’s a common deduction that any CPA should know about. It saved me $4.32 last year 
Ah…that would explain my unfamiliarity with the concept. I’ve never gotten a state tax refund. Especially for the two years I lived in Minnesota…
You should take my advice on everything. And get a shave, yobbo.