Tax Refund categorization

I read a closed discussion suggesting a sub category for tax payment and refund both for fed and state. But, what's the problem with just having a Fed category and a state category and putting both the payment and refund in the right category? What is the downside to not having a sub payment and refund category?


  • UKR
    UKR SuperUser ✭✭✭✭✭
    Tax Refund State
    is reportable as Form 1099-G on your federal tax income and therefore should be a separate Income category.
    Tax Refund Federal ... even though it's not reportable, I keep it as an Income category separate from an expense category for "W-2: Fed income tax withheld", so as not to mess up the numbers.
  • Sherlock
    Sherlock Member ✭✭✭✭
    We use the same subcategory of Tax:Fed for federal payment and refund.  We use a subcategory of Tax:State for state payment and the Tax Refund category for state refund.  

    The location of the categories doesn't really matter.  What is important are the tax-line assignments:

    The federal payment and refund categories are tax-related but are not assigned a tax-line item.
    The state payment category is assigned the Schedule A: State income taxes tax-line item.
    The state refund category is assigned the 1099-G: State and local tax refunds tax-line item.