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Level 1
September 29, 2019
Question

municipal bond Interest not carried from federal to WI state

  • September 29, 2019
  • 2 replies
  • 40 views

municipal bond Interest not carried from federal to WI state

State is asking for Brokers prospectus for a fund from 2016 - how do I find that?

Doesn't Turbo Tax offer some kind of audit assistance?

2 replies

Level 15
September 29, 2019

@ccarley wrote:

Doesn't Turbo Tax offer some kind of audit assistance?


Yes, but it is primarily for assistance with federal income tax issues.

 

See https://support.turbotax.intuit.com/irs-notice/audit-support/

 

You can also try TurboTax Support (link below) during regular business hours.

 

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

Hal_Al
Level 15
Level 15
September 30, 2019

You apparently have a municipal bond mutual fund.  If it's a general fund (as opposed to WI specific), almost all the interest is taxable on the WI return.  The mutual fund company usually provides a breakdown by state (just ask for it) to identify the WI percentage. You have to manually calculate the WI amount to enter in TT**.  See example here https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/2018-tei-by-year.pdf

 

When you enter the interest in the federal section of TurboTax (TT), you will be asked to identify the associated state. You most likely erroneously identified it all as WI.  

 

**Multiply the % for your state by your total tax exempt dividends to get a $ amount (you can't enter the % in TurboTax [TT]). When asked which state, check the box "I earned tax exempt dividends in more than one state". In the drop down menu, select your state and enter the $ amount you calculated. In the 2nd box, select "More than one state" (at the bottom of the scroll down list) and enter the remaining dollar amount.

Your state will tax all the dividends except the dividends from municipal bonds  from your state.

 

Since the WI percentage is likely very small, the simple solution is to just pay the state what they are asking for.