Yes, bond interest may be taxed at a higher rate than retirement income, if you are subject to the Net Investment Tax. Bond interest is investment income and 1099-R income is not.
You are subject the Net Investment Tax if your income exceeds:
- Married filing jointly - $250,000
- Married Filing Separately - $125,000
- Single or Head of Household - $200,000
- Qualifying Widow with child - $250,000
If your income is more modest than that, investment income more then $11,000 will disqualify you for Earned Income Credit.
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