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US treasury vs Money Market fund
The fundamental analysis I’ve completed tells me that US treasury are state tax exempted the place as MMF is federal and state tax non exempted. Proper now it appears just like the treasury and MMF proiving the identical annual % yeild, due to this fact does it make sense to put money into US treasury? there’s additionally a US treasury fund at Vanguard, unsure of that can be state tax exempted? it’d assist to put money into treasury fund to not must hold observe of treasuries expiring in few months and so forth.
JD
Re: US treasury vs Money Market fund
Cash market funds are exempt from state taxes solely to the extent that they put money into US authorities obligations (principally however not solely US Treasuries).
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Re: US treasury vs Money Market fund
JD101 wrote: ↑Tue Sep 03, 2024 9:31 am
The fundamental analysis I’ve completed tells me that US treasury are state tax exempted the place as MMF is federal and state tax non exempted. Proper now it appears just like the treasury and MMF proiving the identical annual % yeild, due to this fact does it make sense to put money into US treasury? there’s additionally a US treasury fund at Vanguard, unsure of that can be state tax exempted? it’d assist to put money into treasury fund to not must hold observe of treasuries expiring in few months and so forth.
Vanguard gives VUSXX Treasury cash market fund.
Sometimes, most (80% + ) of the curiosity this fund earns shall be exempt from state earnings taxes.
Extra particulars right here: https://investor.vanguard.com/content/d … n-2024.pdf
Additionally they supply VMSXX municipal cash market fund which might be exempt from Federal earnings tax. Additionally they supply state particular cash market funds for some states like CA, NY, and so forth.
Regards,
“All of us could be higher traders if we simply made fewer choices.” – Daniel Kahneman
Re: US treasury vs Money Market fund
When Vanguard gives yr finish tax statements equivalent to 1099 INT-DIV and so forth how does one know if the state tax exmeption is there? so that you report it as an earnings on the federal however be sure that this quantity just isn’t added to the state earnings.
JD
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Re: US treasury vs Money Market fund
JD101 wrote: ↑Tue Sep 03, 2024 10:11 am
When Vanguard gives yr finish tax statements equivalent to 1099 INT-DIV and so forth how does one know if the state tax exmeption is there? so that you report it as an earnings on the federal however be sure that this quantity just isn’t added to the state earnings.
The proportion of curiosity that’s earned from US Authorities Obligations (USGO) is described in a year-end tax doc that Vanguard publishes every January or February (linked above for 2023). You multiply that proportion by your curiosity earned and enter that info into your tax software program, or share it together with your tax preparer.
In turbo tax, there’s a query about “Is any of this curiosity earned from USGO?” or phrases to that impact. When you inform the software program what’s up, it normally takes care of it.
Regards,
“All of us could be higher traders if we simply made fewer choices.” – Daniel Kahneman
Re: US treasury vs Money Market fund
JD101 wrote: ↑Tue Sep 03, 2024 10:11 am
When Vanguard gives yr finish tax statements equivalent to 1099 INT-DIV and so forth how does one know if the state tax exmeption is there? so that you report it as an earnings on the federal however be sure that this quantity just isn’t added to the state earnings.
It’s a must to hunt for the doc and know to do this since it isn’t reported in a manner that your tax prep software program will import.
Re: US treasury vs Money Market fund
There’s line 3 on 1099-INT and for those who enter this as line 3 within the tax software program then the tax software program will know to not contemplate this earnings in the direction of state tax. Let me know if this could be right or not. I might want to verify my returns now that this matter got here up.
JD
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Re: US treasury vs Money Market fund
JD101 wrote: ↑Tue Sep 03, 2024 12:02 pm
3- Curiosity on US Financial savings Bonds & Treasury obligationsThere’s line 3 on 1099-INT and for those who enter this as line 3 within the tax software program then the tax software program will know to not contemplate this earnings in the direction of state tax. Let me know if this could be right or not. I might want to verify my returns now that this matter got here up.
For cash market funds, that is normally clean on the 1099. As a earlier poster said, it’s essential to calculate it your self based mostly on some finish of yr fund paperwork you must obtain, from each Constancy and Vanguard. No thought on Schwabb.
For those who purchase US Treasurys from Vangaurd or Constancy, this line shall be populated…however not for those who purchase a Treasury Moneymarket.
I’m not an funding skilled, however I did keep at a Vacation Inn Categorical final night time.
Re: US treasury vs Money Market fund
For those who purchase US Treasurys from Vangaurd or Constancy, this line shall be populated…however not for those who purchase a Treasury Moneymarket.
It was all treasuries purchased by way of Vanguard
JD
