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Originally Posted by Gigi3000
I'm fairly new to investing and have never talked to a CPA. According to Vanguard, I've made $15,000 taxable income so far in 2023 so i should make around $21-23,000 by year end. Most of this taxable income is from my VMFXX Money Market at Vanguard where i have 60% of my funds. I know that a large part of the income from that fund is government securities. On my taxes last year, which i did myself on turbo tax, it asked if my income was from government securities and i said yes so i assume I didnt pay taxes on it. Long story short, do i need a CPA consult this year? Appreciate any enlightment....
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I don’t know whether you need a tax accountant. No one on TOTV actually does.
VMFXX mainly holds US government securities and the fund’s income to its investors is dividend income and subject to Federal taxes. The annual tax form 1099 you get from Vanguard should describe the income as dividends and you enter the income amount on the 1099 in the relevant box of the TurboTax form. You may already know that. Generally, an investor will be taxed by IRS on such income.
Do you know which kind of ‘government’ securities that TurboTax asked you about? If not, check the TurboTax help feature. Use that help feature or Intuit’s TurboTax community forum frequently if needed rather than guessing.
Also, it’s best to understand differences between ‘government’ securities. The main types are US government and municipal government securities.