Enter U.S. Government Interest (DIV)

[jason100]

This screen during the 1099-DIV process asks "Enter the amount of the dividends reports on Form 1099-DIV for XXX that represents interest from US Government obligations." How do I know? Do mutual funds for municipals count? Isn't everything in box 11 (exempt-interest dividends) related to the government in one way or another? TT isn't being very descriptive here.

[JotikaT2]

This information is provided by your brokerage on your 1099-DIV statement or as supplemental information provided with the 1099-DIV. 

You will need to review your statement to determine what should be entered. 

If they have not provided the amount on another page of the form, they usually will include an additional page that breaks out the applicable percentage.  You may need to calculate the amount yourself based upon the percentage provided.

[jason100]

Still confused. The page doesn't indicate what of the exempt interest qualifies as US GOVERNMENT -- e.g. do mutual funds of municipal bonds count? What else?

[JotikaT2]

You will need to contact your brokerage or institution to get more detail then. 

If you have the option to log into your account online, you can log in and get the information that way as well.  

[jason100]

I think I need to first better know what TurboTax considers to be US GOVERNMENT.

[jason100]

For example, when TurboTax asks me what is considered US GOVERNMENT, it it asking out of what's in Box 11, or is it asking for what is NOT already in box 11?

[JotikaT2]

For Federal purposes, it is already included in Box 11.  

It includes interest from U.S Treasury Bills, Notes, and bonds and is taxable for federal purposes; but it may be tax exempt for purposes of your state return depending upon where it is sourced from.

I have attached a link with a bit more detail as to what type of income is taxable and not taxable as it does vary based upon your investment.

Interest income from US obligations

[SteamTrain · Accepted solution]

CAREFUL HERE GUYS !

......for a 1099-DIV, the US Govt Bond interest/dividends that the software is referring to , will be be part of  box 1a, depending on what funds you actually own.      Box 11 is only for Muni's   (or the US Territory bonds...Puerto Rico, Guam..etc)

The mutual fund you are invested in will provide that information on some  paperwork they usually provide on their website for each mutual fund that has US bonds in it (usually as a PDF).   They only provide a % of distribution for each particular mutual fund (usually a bond fund) and you use the % and the "Supplemental Information" on your consolidated 1099-B to calculate the exact $$ amount.

Here's how Fidelity delineates their US Govt Bond info:

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/2019-gse-letter-sai-funds.p...

[jason100]

Thank you. So, to be clear, when I click the box "A portion of these dividends is U.S. Government interest," that portion is referring to any Treasury Bonds found in Box 1a. The amount in Box 11, which is excluded from Box 1a, is made up of Muni's (meaning local and state bonds) and thus should not be included when completing the "Enter U.S. Government Interest" prompt. Do I have it right?

[SteamTrain]

@jason100 

Absolutely Correct.  

AND indicating the US bond interest amount only has an effect for your state taxes, since Your state tax department won't tax the US bond interest, so it could help with state taxes if the $$ amount is significant.  

For every $20 you indicate as US bond interest, it might save you about $1 in state taxes (if at a 5% state tax rate)….so you kind-of have to decide whether it's worth your effort to dig out the exact $$  amount or not, Indicating the US bond interest sub-portion from your fund distributions is not required by any state as they don't mind if you pay a bit more in state taxes. 

ANNND....If you live in a state without a state income tax, you wouldn't bother indicating that amount at all.

[jason100]

Thank you! One of these 1099-DIV investments is in FIDELITY GOV MONEY MARKET (SPAXX) -- can you tell from that Fidelity PDF you referenced which bucket that one falls into?

Also, I have ISHARES TR CORE MSCI TOTAL which generated $592 in foreign income (nonqualified) -- do I also need to enter that on the DID YOU MAKE ANY MONEY OUTSIDE THE UNITED STATES prompt (in wages and income)? Because if I click yes, the next prompt doesn't have 1099-DIV as an option (only W-2 or 1099-MISC or K1).

[SteamTrain]

2) IShares foreign Income:  No...I don't think you'd list it separately...it should be just  standard part of your  1099-DIV form. IF you are using Fidelity, You should be able to look at your Supplemental Data sheets to see if it is going into box 1 .  If any foreign taxes were paid on that income, then there will be some box 7 $$ entry on the 1099-DIV form.  You wouldn't enter it separately as foreign income  (not as far as I can see). 

Some people actually go directly to foreign markets and have foreign accounts set up...or own rental property or businesses in foreign countries, and then they do have separate foreign income to report.

_____________________________

1)  Well...just scanning the list myself , as far as I can tell,  I see the following (you do need to go to that page and read the * footnote though, since not allowed to be used in 3 certain states):

[kashblack1953]

Seems like we keep dancing around the answer.

There is the box to click "A portion of these dividends is U.S government interest" Is:

- Interest from a federal obligation

- Interest from a federal home loan bank

- Interest from a federal farm credit bank

- Interest from U.S. territories obligations

All considered U.S. government interest?

Steve

[SteamTrain]

@kashblack1953 

....I see no dancing here...

For a 1099-DIV form, referring only to box 1a dividend amounts that are federally taxable, the Mutual Fund will lump all those security types together as one number for whatever they hold in whichever mutual funds you own that buys US securities & they won't list each type separately (They know the rules on which ones qualify)...and their % listings (you need to get the % listing from them) should specify what % of the dividends, that you received from each fund, qualifies as US Securities.   Then you calculate the exact amount for each one, total it and put in on that followup page.   Or put in nothing if you can' figure it out.

___________________________

That last one, "Interest from U.S. territories obligations"  I suspect would be listed separately as part of a 1099-DIV box 11 listing if they are Federally tax-exempt....but IF any US territories issue Federal taxable bonds, then those would be part of box 1a and would be handled as already noted..

_______________________

If you own individual bonds of any of those bond types, most of those dividends are handled separately as a part of a 1099-INT, and not a 1099-DIV.

[kashblack1953]

Thanks for the response, still confused as to what turbotax wants. In the back of my 1099 there are entries for

- Federal obligations

- Federal Home loan banks

- Federal farm credit banks

- U. S. territories obligations

So which of these are classed as US government interest? When I put the total of all terms in it gave me an error message during final check as the amount was greater than the interest paid. I know the US territories interest is exempt from state taxes, don't know if this falls under federal interest.