Question

Exempt-interest Dividends

Forum|Forum|5 years ago
February 22, 2021
1 reply
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I have Exempt-interest Dividends in the amount of $546.46. When this information is entered from line 11 on my 1099-Div, my refund amount goes DOWN by $66. That would indicate I'm paying taxes on that money. This works whether I import it from my broker or I enter it my self. I live in GA and this is my Federal return. Can anyone tell me why this happens?

H

HelenC12

Tax exempt income does not increase your (Adjusted Gross Income) AGI but it does increase your (Modified Adjusted Gross Income) MAGI. Your MAGI is used as a basis for determining whether you qualify for certain tax deductions.

One example is that it can increase the amount of taxable Social Security benefit income that is taxable. See Is my Social Security income taxable?

Additional information: What Is the Difference Between AGI and MAGI on Your Taxes?

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