Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?

Konaguy1 — Mon, 08 Mar 2021 23:43:11 GMT

Re: Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?

SteamTrain — Tue, 09 Mar 2021 00:32:43 GMT

IF your 1099-INT contains $$ In multiple boxes, 1 and/or box 3/and/or box 8? .....then When you buy any bonds with accrued interest, you should create a separate new 1099-INT for that bond type.

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1) Thus, for your situation, you would remove any $$ in boxes 8 (and 13 if present) from that 1099-INT, and create a new one manually for that 1099-INT issuer, which contains only the box 8 (&13) $$.

2) THEN, on one of the pages after the main form, you check box "We need to adjust the taxable amount" (yeah...it's not taxable ...ignore that subtle point...Online software doesn't have the word "taxable" in it, but it's the same choice) .

3) Next page is indicating what state or states the box 8 income came from (choose Multiple States for all of it, unless you had only one bond and it was your own state....but that's a different discussion if it was Multiple States, and you want to break out your own state's interest)

4) FINALLY on the next page you enter your $$ of accrued interest and choose the selection "My accrued interest is included in this 1099-INT"

(LATER: CRUUUUUDDDD>>>>That's the order in Desktop software . Online software switches the order of steps 3 & 4 )

Re: Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?

SteamTrain — Tue, 09 Mar 2021 00:22:11 GMT

Ohhhh another major point, if you bought the bond, and it did not issue it's next interest payment until sometime in 2021 , then you cannot declare the accrued interest until the 2021 tax return filed in 2022.

i.e. you can't get a deduction for accrued interest, until the year the bond actually issues interest to you.

topic Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI? in Deductions & credits

Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?

Re: Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?

Re: Where do I deduct accrued iterest paid on tax free bonds? This will affect MAGI which selects IRMAA taxes. How to make this deduction for MAGI?