Your locality taxes interest???
Donāt most local income taxes just start with ācopy down your Fed 1040ā AGI taxable income line 11? I think line 11 is the right line, and that includes interest.
I dunnoā¦ Iām mostly familiar with Ohio and Pennsylvania municipalities and with a tiny handful of exceptions they tax Medicare and rental income. Not retirement benefits or non-rental investment income, just stuff you pay Medicare tax on plus the rentalsā¦ I believe specifically real estate rentals.
Most places Iāve lived in donāt have municipal income tax. Well, Portland had a $35 annual tax on anyone with at least $500 of annual income who lived in Portland for at least one day. And an $0.08 per day tax on anyone who worked in Portland that day. Butā¦ meh.
Iāve worked in Boston and New York City, but I honestly donāt recall how those cities tax. I worked in those cities prior to becoming a tax nerd.
Anywho, in most Ohio & I think all Pennsylvania cities you copy line 5 of your W-2 (Medicare wages), and then you add in the bottom line from Schedules C and E, and maybe F. (I donāt prepare a lot of Schedule Fs.) Nothing from Schedules B or D though.
I think a couple of taxing cities in Ohio do start with the Ohio AGI, which would include most interest (not govvies or Ohio munis, but most other interest).
Thatās pretty rare though. A couple of richy-rich suburbs. Not real cities that non-Ohioans have heard of, or even most of the puny cities that you havenāt.
This is a great idea.