Interest on insurance dividends on VA deposits is not taxable.
Page 62 (interest)
On some qualified bonds, you may be eligible to exclude interest income collected during years that you paid for higher education (education savings bond program).
Page 62 (bonds)
Interest on all US savings bonds is exempt from state and local income taxes, but may or may not be exempt from federal income tax.
Page 64 (bonds and other obligations):
--Interest on bonds issued by a state or the District of Columbia to finance government operations --Interest on some bonds issued by Indian tribal governments
Page 105 (bonds and other obligations):
Certain gains on bonds issued by a state or local government
(These are not the same as tax-deferred interests, such as on an IRA. Your interest may be exempt now, but you WILL pay later; oh yes, you will!)
Posts: 3632 | Location: Washington, US | Registered: 06-03-02
I restrained myself from asking why there is a line for tax-exempt interest on the 1040. Now, I think that the federal government wants folks to find out about--and buy--savings bonds. If anyone thinks that this is nonsensical, I recently heard that a sizeable percentage (I forgot what) of savings bonds are never cashed in, because they are hidden somewhere. Don't all run to see the maturity date on your saving bonds now!
