My paper 1099-INT shows $27.62 on L1. Interest Income, $1425 on L.8 Tax-Exempt Interest and $52.96 on L.13 Bond Premium on Tax-Exempt Bonds. After Importing this into Turbo Tax, Deluxe, I created 2 separate 1099-INT's. I entered L.1 on one form and L.8 and L.13 on the 2nd form. The amount carried by Turbo Tax to L.2a on Form, 1040 was $1402. I thought that Turbo Tax should have shown $1425-$53= $1372. I also tried putting $0 on L. 13 and entering the $53 as an Adjustment, Item B. Bond Premium. This had no impact on the amount on L.2a of Form 1040.
There were also 5 imported 1099-OID's. 3 of them showed L.11 Tax-Exempt OID as $23.34,$9.82, $4.19 and L.6 Acquisition Premium as $23.34,$9.82,$4.19. The L.6 entries were Not Reported to the IRS. These total to $37.35. After importing this into Turbo Tax Deluxe, I put 0's on L.6 and entered the 3 L. 6 amounts as Adjustments as Item P. Acquisition Premium since these were NOT Reported to the IRS. Regardless of whether I entered these on L.6 or as an Adjustment, nothing changed on Form 1040, L.2a. There were no other entries on the 1099-OID's. The other 2 1099-Oid's only had Tax-Exempt OID of $7.28 and $22.68 that was NOT Reported to the IRS. These were entered into L. 11 Tax-Exempt OID. I was under the impression that neither of these would have any effect on the amount of Tax-Exempt Interest that is reported on Form 1040, L.2a as OID for Tax-Exempt Bonds merely affects the Cost Basis of the bond but has no effect on current year Tax-Exempt Interest that is reported on Form 1040, L.2a.
What is the correct # that should be on Form 1040, L.2a? How do I enter the raw information into Turbo Tax so that the amount on Form 1040, L.2a will be correct? Please explain this. Does the software need to be corrected?
