Yes, this procedure works fine for ordinary dividends and interest, but I have exempt-interest dividends and, while TT will allow me to make the adjustment as discussed below, it DOES NOT deduct the adjustment from 1040 line 2a (where the exempt interest is reported) AND it gives me an error saying that the adjustment is greater than the ordinary dividends reported. This is the case because there is only a couple of dollars of ordinary dividends and the majority is tax-exempt. I can't see any way to make TT make the adjustment on the1040 form. It only reports the adjustment on the worksheet for the 1099. Do I have to do that manually and, if so, where do I note that adjustment was made?
