Is it worth calculating the U.S. Government dividends (for Oregon taxes) from an IRA withdrawal (Vanguard mutual funds)?

Forum|Forum|1 year ago
February 14, 2025
1 reply
0 views

Oregon doesn't tax the interest received from U.S. Government bonds.

I made my first withdrawal from an IRA (at Vanguard) last year and Turbotax is asking me how much of my dividends came from U.S. Government obligations.

Vanguard releases a document each year showing the percentage of the dividends for each mutual fund that came from U.S. government obligations. Theoretically, I can go back to ALL years I've had the IRA and determine how much of each fund is deductible. However, my gut says it may not be worth it.

Does anyone have experience with this? I'm a guy who loves details, but this seems like too much...

TurboTax Home & Biz Windows

Best answer by Hal_Al

Actually, you do not have to make that decision. Note that your distribution, from the IRA, was reported on a form 1099-R, not a form 1099-DIV.

Although the IRA was earning dividend income, while the money was in the IRA, it is not treated as dividend income when it is withdrawn (distribution). It is taxed as plain retirement income and the type of investments, it came from within the IRA are ignored. None of the 1099-R amount is considered as coming form US government obligations.

Hal_AlAnswer

Employee

Actually, you do not have to make that decision. Note that your distribution, from the IRA, was reported on a form 1099-R, not a form 1099-DIV.

jdseymourAuthor

Thanks for this. I suspected that was the case - but the TurboTax guidance implied (to me) that it wasn't.

Perhaps Intuit could make this clearer in their question because all they say is: "Some of the money in our IRA ... was invested in U.S. government bonds and notes". And that seems true for most people with mutual funds.