Accrued Interest on 1099-B

[Speechteach]

I have accrued interest paid on several short-term treasuries that have matured.  For this reason, the brokerage firm reported them on FORM 1099-B.  How do I enter the accrued interest paid on these using this form? I noticed that although I have filled out FORM 1099-B, the amount shows up under the Interest Income 1099-INT. section.  Thank you in advance for your assistance. 

[DianeW777]

My advice is to report the accrued interest as interest income (Form 1099-INT) instead of 1099-B.  There you can make your adjustment for the portion of accrued interest you paid at purchase.  If you are reporting Interest income on a bond that had accrued interest at the time you purchased, then you would reduce your interest income by the accrued interest at your purchase date. Enter the full amount of the interest, and then enter the Accrued Interest paid as an adjustment to reduce it. 

Open your TurboTax return:

1. Search (upper right) > Type 1099int > Click on the Jump to... link
2. Enter your interest income > Continue > Select 'I need to adjust the interest reported on my form'
3. Enter the adjustment amount (accrued interest at purchase) > Select 'My accrued interest is included in this 1099-INT'
4. This will accomplish the correct taxable income for your return.

                                   

                      
 

[mstondreaux]

I followed the steps for entering the accrued interest but the interest is not being reduced on Schedule B of the tax return.

[lordguido]

The amount I entered  on 1099 int for 'adjustment to interest under A accrued interest is being reduced by something. for example I post a $-1000 and it shows up on schedule B as $-300. The deduction is not a consistent  number. I can't figure out what is causing the reduction. On past returns, the number entered was the same on Schedule B. Any thoughts? 

[LK2023]

I am having a similar problem in that I entered the Accrued Interest properly - there are multiple entries - and it appears to be subtracted properly from the total on the Schedule B Form ... BUT Schedule B has text saying Accrued Interest but there is NO figure in the column of numbers that shows the total Accrued interest that is being subtracted. This was NOT the case last year - this definitely appears to be a bug. I'm not sure if I can manually enter the number in the Forms view so the IRS can see the Total Accrued Interest figure.

[lordguido]

I found out you can't enter directly on #B. If you go to the bottom of the worksheet for the financial institution, there is "Adjustments to Interest" including "Accrued Interest"  However, there's a bug and this happened last year too, the number that you enter is NOT the number that appears on the worksheet. It changes for some reason??? If you click on the line where the number appears on the worksheet, it bring up another worksheet to enter an explanation and various number. Here you can play with the amounts to get the correct number.

On #B it may not show until you scroll down in the area.

I hope it helps. 

[LK2023]

Thank you for the response, lordguido.  I'm finding that the Accrued Interest number being subtracted is correct, but the problem is that that number is not being printed on the Schedule B form. So it says something like "Interest Adjustments - " indicating some number is being subtracted but it is not visible. So the numbers are correct, but what's appearing on the Schedule B has a deficit - a blank - where the number for Accrued Interest that is subtracted from the total should appear. 

[lordguido]

I have 2 numbers under the adj, ABF & Accrued Interest. On TT, I only see the ABF but if click om the tab next to it , the accrued interest shows. When I looked a the print preview, TT combined both numbers & showed it under Adj to interest expense. if you scrawl down, the worksheet appears with both number but that is not sent with the tax return. Good Luck 

[DianeW777]

As long as the taxable interest is correct, and you have made the necessary adjustments so that you are paying tax on the correct amount, you can be confident to file your tax return. You have all necessary information with your tax file should you need it later.

Be sure to keep a printed or pdf copy of your tax return. 

TurboTax Desktop: How do I get a .pdf copy of my return?

• Be sure to select the same 'Include government and TurboTax worksheets'

TurboTax Online account.

1. Navigate to the Tax Home or the "Your Tax Returns & Documents" section.
2. Select Add a State (this just re-opens your return; you won't actually add one).
3. Select Tax Tools in the left menu, then select Print Center.
4. Select Print, save or preview this year's return.
5. Choose to include Include government and TurboTax worksheets (optional) for the maximum detail.
6. Select View or Print Forms to generate and download the PDF

@lordguido 

[LK2023]

Thank you lordguido, I was able to see the accrued interest in the Print option on the pdf. I later had another issue with accrued interest on my NJ Tax Return - it wasn't coming through. You have to split up your 1099s even more to solve this problem - you can't have any Bond Premium on the same 1099 as accrued interest or TurboTax won't carry the accrued interest over to the NJ return. Lots of tricky areas!

[LK2023]

Thank you DIane W777. See my post to lordguido up above. The accrued interest issue on my NJ return was more significant in that the accrued interest did not carry over at all. Fortunately, the Support Community here is wonderful and I found the solution elsewhere - e.g., it's best to enter any Bond Premiums separately, because if they are present with the Accrued Interest entries they prevent the flow of accrued interest to NJ returns. I just split out the Bond Premium, along with enough Treasury Interest to cover it, and that solved the problem. But I had multiple separate entries to make b/c of this issue.

[fanfare]

The support community may be wonderful but TurboTax bugs are not.

@LK2023 

[lordguido]

Sorry LK2023, I can't help you with a state return, I don't pay state income taxes.