HELP! So why is the tax so different? If I enter my Treasury Notes $8400 interest in box 3 from my 1099-R, I get back $1600 LESS than entering the SAME amount in Box 1 instead (let's ignore the whole state tax stuff). Is treasury interest taxed at a much higher rate or something on short term Treasury notes? I am totally baffled what is going on and searching on the internet has produced no answers. I wondered if TurboTax had an error or something? Or is there a reason other than the state taxation that Box 3 was created? Note: I always held them to maturity, but bought 3-12 month "bonds".
