TurboTax seems to be automatically dividing the interest that has accrued into Treasury and non-Treasury interest. This is even though all of it should be classified as Treasury interest in your case. To correct this, you may need to manually adjust the taxable amount in TurboTax.
Based on guidance from TurboTax users, you can try the following steps:
- Enter your 1099-INT details as usual.
- After entering the 1099 INT, there will be a screen that appears, with a check box that says "I need to adjust the taxable amount."
- The next screen is where you will adjust this. The reason you will give for the adjustment is My Accrued Interest is included in ths 1099 INT.
- Manually enter the accrued interest paid in the adjustment box.
- Make sure the adjustment only applies to Treasury interest. If TurboTax is still splitting it wrong, you may need to enter the Treasury interest separately on its own 1099-INT form.
This should help TurboTax correctly allocate the accrued interest.
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