Open Question: Why last year tax refund will be taxed again this year.?
I had tax refund on my 2006 tax return. But amount of refund needs to be taxed again in 2007 (item 10 on form 1040). The question is why? The refund was over paid tax money in 2006. In my opinion, I let government to use my over paid tax for a year without interest, but government in turn tax the money again on the refund in 2007. It seems to be double taxation on the refund money. If I paid less tax in 2006 without refund, then this money already in my pocket, why the over payment of the tax needs to tax again?
