Question 1. For the Federal Return, does TT automatically deduct the Municipal Bond interest from Federal taxable income since it is not supposed to be taxed?
A.1. Yes.
Question 2. For the State Return (MD), does TT automatically deduct the US Treasury interest income as it is not taxed by state or local government?
A.2. Yes.
Question 3. For the State Return (MD) Municipal bond interest, do I just need to document the MD bond interest so in can be deducted from taxable interest income?
A. 3. Yes.
After entering your 1099-INT, two screens later, you'll be asked "tell us if any of these uncommon situations apply". Check the box "Our state doesn't tax all this interest".
