Hello Experts,
Confused why my federal tax refund goes up when I enter my treasury bill interest in box 3 verses box 1 for 1099-INT. The amount is the same, but the tax liability is higher when entering in box 1 than in box 3. I know interest from treasury bills is exempt from state and local taxes, but I thought it was treated as regular interest for Federal tax purposes. Again, same amount in box 1 produces a considerably different tax liability than if I put this amount in box 3 and blank out box 1.
Any ideas why this is the case?
Thanks for your input in advanced.
Dave
