In 2012, for the first time, I purchased shares of T Rowe Price Virginia Tax Free Bond Fund through a brokerage account at Vanguard. I am a Virginia resident. I don’t see any tax forms for this account on the Vanguard site, but I did see Form 1099-DIV for three other VG bond funds I have. I do see that the T Rowe Price VA tax-free fund paid me dividends in 2012 (Federal and VA tax free) by looking at the Dividend and Capital Gains Distribution VG page for my nontaxable accounts. Should I be expecting a tax form for this account from Vanguard or will I get one in the mail from T Rowe Price?
I had exempt-interest dividends reported in Box 10 of 2012 Form 1099-DIV for VG Intermediate Term Tax-Exempt Bond Fund and I know I need to report those on line 8b of Form 1040 as Tax-Exempt Interest for the 2012 tax year. So I should include on line 8b the tax free dividends from the T Rowe Price VA Tax Free Bond fund also, correct?
I don’t use any tax software, I just do my taxes by hand, although I did start using free electronic filing last year. My understanding of reading the tax instructions is that tax-exempt interest and dividends don’t get reported on Schedule B, only on line 8b of 1040, correct? I realize from reading some other Boglehead postings on reporting of tax-exempt dividends that some people’s use of tax prep software may report a Tax –free Fund on Schedule B with amount of dividend as zero, but I don’t think that is required by the IRS- I don’t see anything in the 1040 or Schedule B instructions indicating this should be done.