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How do I enter tax exempt bonds in My Plan?
How do I enter tax exempt bonds in My Plan?

This article describes how to enter tax exempt bonds in your Plan.

Nancy Gates avatar
Written by Nancy Gates
Updated over a week ago

Tax Exempt Bonds

Some bonds distribute interest and/or dividends on an annual basis which are tax free at the Federal level and/or State level. This functionality is not currently available in PlannerPlus. We recommend you use the workaround below to account for the tax free interest and/or dividends in this type of account.

METHOD 1

STEP 1: Head over to MyPlan > Accounts and Assets

STEP 2: ➕ Add the account as a Checking/Savings/Investment account

STEP 3: Give the account a descriptive name, "Treasuries" for example

STEP 4: Select Ordinary Income as your tax treatment

STEP 5: Enter your Account Balance

STEP 7: Set your rates of return to zero

STEP 8: Add a monthly pension for the interest income

For bonds that are tax free at the state level, add annual interest as a pension and select "Federal Only" for taxes. For bonds that are tax free at the federal level add annual interest as a pension and select "No" for taxes.

METHOD 2 When you use this method the Planner will increase the account balance based upon your rates of return, but neither the interest/dividends or withdrawals will be taxed on any level.

STEP 1: Head over to MyPlan > Accounts and Assets

STEP 2: ➕ Add the account as a Checking/Savings/Investment account

STEP 3: Give the account a descriptive name, "Muni Bond Fund" for example

STEP 4: Select Capital Gains as your tax treatment

STEP 5: Enter your Account Balance

STEP 6: Enter a Cost Basis that is higher than your Account Balance

STEP 7: Set your rates of return

STEP 8: Exclude the account from your withdrawal strategy


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