Tax Free Bonds

[Pollyresi]

My 1099-Int has an entry in block 8 of tax free interest.  If I enter that into the turbo tax program I get a Federal Tax due of approximately $300 but if I do not enter the tax free interest then the Federal Tax changes from Tax Due to Tax refund of nearly $ 800.  Why does Tax Free interest change my Federal Tax line.  My state has no income tax so I am only filing Federal report.

[SteamTrain]

IF you are retired and on Social Security, those Muni "exempt" $$ are added to the calculation which determines how much of your SS is taxed.  So they do have an effect in some cases.

Once 85% of your SS is being taxed, then added $$ there won't have an effect.

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For much higher income retired people, those exempt $$ are also used in determining if they are required to pay higher premiums on their Medicare coverage payments

[Pollyresi]

Thanks for the reply.  In the meantime I had figured out the answer.  I compared two 1040 forms, one with tax Free entered and one without tax free.  Then when I compared the two I found the change in the taxable SSS.

Thanks again