This year (2016) I am a waged employee and will earn something close to $100K. Next year (2017) I don't plan to work at all so my projected income for 2017 would be $0.
Since the state tax that I paid this year (including the amount I overpaid) is deductible in my 2016 federal tax return. Wouldn't it make sense to dramatically overpay state tax this year and then itemize it?
For example, assuming I would overpay 40K in state taxes this year, then my taxable income for 2016 would be 100K-40K=60K. Next year I would receive from state 1099G form with 40K for which, I assume, I would have to pay tax in 2017, but it would be lower income tax bracket.