YOUR MONEY
CREDIT, COLLEGE, TAXES AND REAL ESTATE
PRINT
EMAIL
DEL.ICIO.US
DIGG THIS- Ask Kim - Handling Debt After a Divorce
- Stock Watch - What GE's Miss Says About the Economy
- Fund Watch - For a Limited Time Only: A Legendary Manager
- Starting Out - Health Insurance for Twentysomethings
- Value Added - Six Stocks to Buy and Hold
- Cash in Hand - Pipeline to High Income
- Money Smart Kids - What We Learned From My Mother
- Drive Time - Guilt-Free SUV?
- On the Job - Making Work Fun
- More
 MORE TAX IDEAS | |||
For more tax answers, watch Kevin McCormally's "Tax Tips" segment on Nightly Business Report every Monday in March as well as April 10 through 14 on your PBS station. |
Most investors in U.S. government securities -- such as Treasury notes and bonds and U.S. savings bonds -- know that the interest earned is tax-free on their state returns.
It's important to realize that some income paid by mutual funds gets this state-income-tax break, too. Ignore it and you'll pay too much to your state treasury.
Some money market mutual funds invest heavily in U.S. government obligations, so a substantial portion of the income they pay during the year is state tax-free. Some bond funds invest solely in U.S. government securities, so all of their income dividends are state tax-free.
You can eve get state-income-tax-free income from stock mutual funds. Why? Because the portion of the fund's assets held in cash may be invested short-term in government obligations. The interest earned -- and passed on to shareholders -- may be state tax-free.
Your funds should have advised you what portion of your income dividends may be state tax-free. That valuable information doesn't come on the 1099-DIV form that reports income but in a separate document. Check your records or call the fund's toll-free number for details.
Reprint Article
|
|
|
|
|
