Tax free interest


M

Me-manny

For the first time I have some tax free interest in 2011. I see that
there
is a place to enter it on IRS Form 1040. If I do not report it will I
be penalized?
Is there some future advantage to reporting it now (it is in an
account with
Merrill Lynch and I did not withdraw it).
 
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A

Arthur Kamlet

For the first time I have some tax free interest in 2011. I see that
there
is a place to enter it on IRS Form 1040. If I do not report it will I
be penalized?
Is there some future advantage to reporting it now (it is in an
account with
Merrill Lynch and I did not withdraw it).

Tax exempt interetmight affect other tax andnontax items and IRS
does ask you to place T/E interest on Line 8b.


Items affected include EIC, social security taxation, Medicare B
surcharges, sales tax deduction, and others.
 
P

Phil Marti

For the first time I have some tax free interest in 2011.  I see that
there
is a place to enter it on IRS Form 1040.  If I do not report it will I
be penalized?
I'm really having trouble understanding what's behind this question.
You sign a return under penalty of perjury, saying that
it's complete to the best of your knowledge. Doing that while knowing
that you've left out required information appeals to you
because...? OTOH, if you inadvertently omitted it on a return you've
already filed and are wondering whether you should
amend the return, my question would be whether it would affect
anything else on the return.

Phil Marti
VITA/TCE Volunteer
Clarksburg, MD
 
I

ira smilovitz

For the first time I have some tax free interest in 2011. I see that
there
is a place to enter it on IRS Form 1040. If I do not report it will I
be penalized?
Is there some future advantage to reporting it now (it is in an
account with
Merrill Lynch and I did not withdraw it).
Keep in mind that Merrill Lynch has reported that interest to the IRS so the IRS knows about it.

Ira Smilovitz
Leonia, NJ
 
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M

Mark Bole

Tax exempt interetmight affect other tax andnontax items and IRS
does ask you to place T/E interest on Line 8b.


Items affected include EIC, social security taxation, Medicare B
surcharges, sales tax deduction, and others.

Plus state income tax return in some cases.
 

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