Where can I find tax-exempt interest income on 1040?
Tax exempt interest income can be found on IRS Form 1040-line 2a.
Tax-exempt interest.
In general, your tax-exempt stated interest should be shown in box 8 of Form 1099-INT or, for a tax-exempt OID bond, in box 2 of Form 1099-OID, and your tax-exempt OID should be shown in box 11 of Form 1099-OID. Enter the total on line 2a of your Form 1040 or 1040-SR.
In the Dividends and Distributions section of your Form 1099, you may have a value in Box 12: “Exempt-interest dividends.” This value represents dividends received from ETFs like MUB, which hold a broad range of U.S. municipal bonds that pay federal tax-exempt dividends.
Reporting interest income on your tax return
You should report tax-exempt and taxable interest on your income tax return (lines 2a and 2b of the 1040). You may also be required to file Schedule B, if your taxable income is more than $1,500 or under certain other conditions (see the form instructions).
However, some interest you receive may be tax-exempt. You should receive Copy B of Form 1099-INT or Form 1099-OID reporting payments of interest and/or tax-exempt interest of $10 or more. You may receive these forms as part of a composite statement from a broker.
Box 1 of the 1099-INT reports all taxable interest you receive, such as your earnings from a savings account. Box 2 reports interest penalties you were charged for withdrawing money from an account before the maturity date. Box 3 reports interest earned on U.S. savings bonds or Treasury notes, bills or bonds.
Most interest income is taxable-that is, it is subject to income tax. Tax-exempt interest income is not subject to income tax and is earned on funds loaned to states, cities, counties, or the District of Columbia. In most cases, interest income is reported on Form 1099-INT.
Box 12 represents tax-exempt interest. You have to enter the amount in box 12, but on the next screen, put a checkmark in the first box - A portion of these dividends is US Gov. interest.
To enter exempt-interest dividends from Form 1099-DIV, box 12: Go to the Screen 12, Dividend Income (1099-DIV). Scroll down to the Tax-exempt Interest subsection. Enter the amount in the field Total municipal bonds.
An exempt-interest dividend is a distribution from a mutual fund that is not subject to federal income tax. Exempt-interest dividends most often are derived from mutual funds that invest in municipal bonds.
What is line 2a on 1040 tax-exempt interest income?
Tax exempt interest income can be found on IRS Form 1040-line 2a. If married, and you and your spouse filed separate tax returns, enter the total amount of your combined tax-exempt interest income. Note: The line number references above are from the IRS tax form, not from the W-2 form.
The most common sources of tax-exempt interest come from municipal bonds or income-producing assets inside of Roth retirement accounts.
Are Exempt Interest Dividends Taxed? Exempt interest dividends from mutual funds aren't taxable, but you should report them on your return if you're required to file. Dividends exempt from interest might be subject to Alternative Minimum Tax (AMT).
Although tax-exempt interest is not itself taxable, it can cause the taxation of additional social security benefits because the interest is added to adjusted gross income to form a larger modified adjusted gross income.
Tax-exempt interest is an amount of interest that isn't subject to the regular federal income tax. Even though you might have to still report it on your return, it doesn't mean you have to include it in your taxable income. And since it's exempt from the taxable income you earn, it isn't subject to federal tax.
The next commonly used box on Form 1099-INT is Box 8, which reports the amount of tax-exempt interest. This type of interest is most often earned off of obligations issued by a state or other governmental entity. This amount is not taxable and is not to be included in the taxpayer's gross income.
The 1099-INT is a type of IRS form that shows how much interest an entity paid you throughout the year. You might receive a 1099-INT from your bank because it paid you interest on your savings. You'll use the information on a 1099-INT to fill in certain fields of your federal income tax return.
If you receive a Form 1099-INT and do not report the interest on your tax return, the IRS will likely send you a CP2000, Underreported Income notice. This IRS notice will propose additional tax, penalties and interest on your interest payments and any other unreported income.
Tax-exempt income is income from any source which the Federal, state, or local government does not include when implementing its income tax. Individuals and organizations may have to report this income on a tax return, but the income will not be considered when determining their tax liability.
Tax-exempt interest dividends are reported in Box 11 on Form 1099-DIV. The amount shown in Box 11 on Form 1099-DIV should be reported on your Federal income tax return on IRS Form 1040 or Form 1040A. Amounts reported in Box 11 on Form 1099-DIV are NOT subject to Federal income tax.
Where do I report 1099-INT box 13?
- Go to Screen 11, Interest Income.
- Enter the Name of Payer.
- From the left Sections, choose Form 1099-INT.
- Scroll down to Tax-Exempt Interest.
- Enter the amounts in Amortizable bond premium on tax-exempt bonds (code 37).
Section 897 gain.
If any part of the ordinary dividend reported in box 1a or capital gain distributions reported in box 2a is attributable to section 897 gains, report that gain in box 2e and box 2f, respectively.
Box 12 represents tax-exempt interest. You have to enter the amount in box 12, but on the next screen, put a checkmark in the first box - A portion of these dividends is US Gov. interest.
If your taxable interest income is more than $1,500, be sure to include that income on Schedule B (Form 1040), Interest and Ordinary Dividends and attach it to your return.
- F/S. : If the interest is federal-only or state-only, code it as federal or state. ...
- TSJ. : Code the interest to the Taxpayer, the Spouse, or as Joint. ...
- Payer. : Enter the payer name.
- Tax Exempt. ...
- AMT Int Income (PAB) ...
- In-State Muni $ or %
