I have received 1099-DIV from Vanguard for 2 funds: VCITX and VWAHX. Both of these funds are federal exempt. VCITX is CA exempt, but VWAHX is CA taxable.
In the form there are amounts entered in boxes 1a "Total ordinary dividends":$12.27, 2a "Total capital gain distr":$51.49, 11 "Exempt interest dividends":$1485 and 12 "Private activity bond interest dividends":$124.
I did an auto-import of the forms from Vanguard website and everything looks fine. However, since part of the dividends are CA taxable, I need to adjust the CA taxes.
When I moved over to State taxes, it did ask how much amount was less than 50% CA tax exempt out of $1485 and I entered $683 which is VWAHX.
Now, I wanted to know if this is right what I did?
Also, do I need to do anything special for the other amounts in this form since when adjusting the state tax, it only took into account Box 11 amount. There were other boxes which the software didn't take into account.
Please return to the federal section.
- Click edit next to the interest and /or dividend entries that need more attention.
- Review the screen with the entries, click continue
- next screen asks Tell us if any of these uncommon situations apply to you and you select either US Government interest or need to adjust these dividends.
- If Government interest:
- the next screen asks how much from your state in Enter US Government interest
- Tell us more about your exempt-interest dividends,
- choose one state or more than one,
- If you chose need to adjust these dividends:
- then select I need to adjust these dividends,
- enter the dividend adjustment
- select Other adjustment
- choose the correct option for your situation, one state or more than one
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@AmyC I did go to the screen where it mentions "Enter US Government interest". However, both the funds (Vanguard High-Yield Tax-Exempt Fund and Vanguard California Long-Term Tax-Exempt) that I mentioned are Tax-exempt at the federal level as they are Muni-bonds.
See link here, https://personal.vanguard.com/pdf/INBST_012020.pdf
I think, I don't need to do anything at the federal level, rather just adjust the Vanguard High-Yield Tax-Exempt Fund at the state level (CA) since it doesn't own 50% assets in CA.
Let me know if this is correct.