Income paid from U.S. government bonds is taxable at the Federal level but may be exempt from state income tax for many people. The 1099 Composite forms do not usually have enough information included to calculate this potential exemption alone, but with information from the fund managers, it's possible to see what potential savings there may be.

It can be confusing to understand the nuances of whether to invest in a Roth vs. a Traditional IRA. How are they different and how should you decide which to use?