consolidated 1099-DIV from Vanguard

[joebeets]

I have an account at Vanguard in which I have several mutual funds and ETFs.  Four of these are tax-exempt bond funds, so their dividends are exempt from Federal tax.  Three of these four are nation-wide in scope, so their dividends are NOT just from ONE state but are spread across multiple states.  As a result LESS THAN 50% of their dividends are from California, and since 50% is the minimum required to be exempt from California tax,  these dividends are exempt ONLY from Federal tax and are NOT exempt from California tax.

However, for the 4th tax-exempt bond fund in this account,  the dividends are 100% from California.  So these dividends are exempt from BOTH Federal tax AND California tax.

The problem is for 2020 Vanguard sent me ONE 1099-DIV for the entire account.   At the top is listed the consolidated 1099-DIV info at the account level, where the amounts in the boxes are for the TOTALS of all the funds in the account.  Then below this is listed each fund, showing the 1099-DIV box numbers and the amounts for each box.  Adding up the amounts in each box for ALL the funds equals the same amounts in the account-level consolidated 1099-DIV at the top.

But when I imported from Vanguard, all that comes across are the account-level consolidated amounts.  So when it asks "Which state are your exempt dividends from?", it refers to the TOTAL amount for the account, NOT one-at-a-time to the amount for each of the 4 funds that paid exempt dividends.  So I added up the amounts for California for each fund, and I entered this sum for "California", and I entered the sum of the NON-California amounts for "More Than One State".  And because LESS THAN 50% of the total exempt dividends for this account are from California, the dividends from the California-only fund will NOT be exempt from California tax even though they meet the requirement.

So how can TurboTax recognize that the dividends from the California-only fund are exempt from BOTH Federal tax AND California tax because 100% of the dividends are from California?

The only thing I can think to do in TurboTax is to delete the Import of this 1099-DIV and then manually enter the info for each fund in the account SEPARATELY.  With 13 funds in this account, this would be very time-consuming, not to mention the odds for error would be very high.

Thank you!

[AmyC]

You can enter 4 lines and cover the entire form. You may want to do an extra line for the CA income separately.

Enter the totals for each:

• short term covered
• short term non-covered
• long term covered
• long term non-covered

[joebeets]

Thanks, but I was asking about DIVIDENDS (1099-DIV), not Capital Gains (1099-B).

My first question is: Can't TurboTax import the detailed 1099-DIV info for each of the 13 funds in the account, since this info is on the 1099-DIV (below the account-level info) that Vanguard sent me?  Or can it only import the account-level 1099-DIV info that is the totals of the 13 funds' Dividend info?

If TurboTax can only import the account-level totals, I said before the only thing I can think of is to delete the import of this 1099-DIV and manually enter 13 1099-DIVs, one for each of the 13 funds in the account.  Now I thought of another possibility: Keep the import of this account-level 1099-DIV, but edit it by subtracting all the amounts for the California-only fund.  Then manually enter a second 1099-DIV for ONLY this California fund.  So 2 1099-DIVs instead of 13.   Does IRS permit me to do either of these things I've mentioned?

Thanks.

[joebeets]

One more question:  Even if IRS does permit me to do the things I mentioned, will their software be able to reconcile the 1099-DIV sent to them by Vanguard against my tax return I file with TurboTax? 

Thanks!

[TerukoL]

Some TurboTax online customers were getting a "needs review" warning after entering the amount of government interest reported on their 1099-DIV. 

We are happy to inform you a recent TurboTax update has been released resolving this issue. If you are using TurboTax Online, updates are applied automatically.  If you are using TurboTax Desktop, make sure you download and install the latest update.  If you need assistance with updating, please refer to the following support article.

How to Update TurboTax
https://ttlc.intuit.com/questions/1901183

Please click:

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