Disability and Deductions

[badnaam]

This is for California state.

I was on disability all year for 2010. During the year, I got disability payments from the state and ex-employer (I also lost my job when disabled in 2009) sponsored disability plan (employer paid premium).

I got W2 only from the employer paid disability program and it was entered into turbo tax as third party sick pay.

Normally, I get a sizeable deduction from my home mortage interest, property taxes, but this year I notice that my deductions are 8 times less (my income for last year i.e. the disability pay is also roughly 8 times less than my previous year's earnings).

It does not seem right, that since I didn't make as much because I was disabled, I am not getting any deduction back from my mortage interest (which was more or less same as prior year 2009).

I also seemed to incur quite a bit of medical expenses, more than 7.5% of my AGI and even that does not seem to change my federal refund by much. It seems my federal refund is stuck at a certain number and no other deductions seem to be able to move it at all.

Is this how it should be or am I missing something?

Thanks

 

[LdiJ]

This is for California state.

I was on disability all year for 2010. During the year, I got disability payments from the state and ex-employer (I also lost my job when disabled in 2009) sponsored disability plan (employer paid premium).

I got W2 only from the employer paid disability program and it was entered into turbo tax as third party sick pay.

Normally, I get a sizeable deduction from my home mortage interest, property taxes, but this year I notice that my deductions are 8 times less (my income for last year i.e. the disability pay is also roughly 8 times less than my previous year's earnings).

It does not seem right, that since I didn't make as much because I was disabled, I am not getting any deduction back from my mortage interest (which was more or less same as prior year 2009).

I also seemed to incur quite a bit of medical expenses, more than 7.5% of my AGI and even that does not seem to change my federal refund by much. It seems my federal refund is stuck at a certain number and no other deductions seem to be able to move it at all.

Is this how it should be or am I missing something?

Thanks

One of two things could be happening...you could be hitting the Alternative Minimum Tax, in which case no further deductions will help you, OR (and the most likely) is that you have completed zero'ed out and there is no more income to deduction anything against. Once you get to zero taxable income, additional deductions are not of any use.

 

[davew128]

One of two things could be happening...you could be hitting the Alternative Minimum Tax, in which case no further deductions will help you, OR (and the most likely) is that you have completed zero'ed out and there is no more income to deduction anything against. Once you get to zero taxable income, additional deductions are not of any use.

Stop. You're being too rational and logical.