1099 Income and Tax Prep Deductions People Commonly Miss

1. 2025 Money Market Yields and State Tax Exemptions

One of the primary draws of investing in Treasury Bonds and Treasury-backed money market funds (besides high rates) is the tax benefit: Treasury Bond Interest is exempt from State Tax. In California that’s a big deal- residents earning over $111k jointly pay 8%+ in state income tax. Here’s a list of our commonly used cash alternative positions with relevant exemption amounts:

Fund Name	Ticker	Percentage from Government Obligations
Fidelity® Government Cash Reserves*	FDRXX	52.17%
Fidelity® Government Money Market Fund	SPAXX, FZAXX, FZGXX, FZCXX, FZDXX	50.90%
Fidelity® Treasury Only Money Market Fund	FDLXX, FSIXX, FRSXX, FTYXX, FOPXX	98.67%
iShares 0-3 Month Treasury Bond ETF	SGOV**	95.14%
iShares 0-1 Year Treasury Bond ETF	SHV**	89.80%
BondBloxx 6-Month US Treasury ETF	XHLF	99.68%
BondBloxx Bloomberg 1-Year US Treasury ETF	XONE	99.87%
FCASH*	FCASH	0.0%

FCASH: Unlike Fidelity's money market mutual funds FCASH is a free credit balance held by the brokerage, not a mutual fund that invests in U.S. government securities. Because it does not derive its income from U.S. Treasuries or other government obligations, it typically does not qualify for state income tax exemptions.

2. Qualified Charitable Deductions

1099-R reporting can be confusing, because the IRS doesn’t require specific Charitable donations from IRA’s to have their own separate line item. Instead, there’s a small box that says “Taxable amount not determined”. If you did donate to charity from your IRA, that money should be non-taxable to you, but you may need to remind your tax preparer how much was a donation vs money you collected yourself.

For example, if your RMD was $50,000, but you gave $25,000 of it directly to charity as a QCD, your 1099-R would still look like this:

Please let us know if you need a reminder or copies of your donations for your accountant.