I received a 1099-INT from the banking institution where my spouse and I cashed in mature EE bonds in 2019.
The interest on those bonds has been paid on a yearly basis since they were purchased in 1989--reported in our tax filings accordingly--and as such needs to be adjusted.
Following the advice found for similar issues in this forum question and this one, I selected I need to adjust the taxable amount and then This savings bond interest was previously reported. However, TurboTax gave me an error during the SmartCheck saying that this interest "cannot be previously reported interest since this is regular interest."
Can someone advise how to eliminate this error while still accounting for the previously paid interest? Or, should I simply ignore the error and move forward with the filing?
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The solution to your dilemma is hiding in plain sight. I am responding because it just took me a few hours to see the solution and hopefully this will help others like you and I . Here ya go : On the 1099-INT form that you received note that there are several boxes that could contain information ; note that the savings bond interest (should be) is reported in box "3" . Take a look at the turbo tax input page and you will see that you can check a box next to "My form has info in more than just box 1 (this is uncommon) " . Check the box and magically the input form will expand and you can enter the interest from the bond into the box 3 spot . After that , when you check the box to indicate that taxes on a portion of the interest has been previously paid , you will not receive an error message. Box one on form 1099-int is indeed for "ordinary interest" ; but the bond interest is not ordinary interest . Hope that helps !!
I see the original poster started this thread in April 2020, but it looks like it fell through the cracks and was "orphaned" and thus never answered until now.
@ ejdjd1 correctly outlined the solution to this above. In my opinion, TurboTax should by default show all the boxes of the 1099-INT to everyone to avoid such confusion. Since TurboTax initially only shows Box 1, it's easy to see how one might mistakenly and reflexively enter the savings bond interest in the wrong box. As ejdjd1 mentioned, when one notices the check box to expand that screen and enters the full savings bond interest correctly in Box 3, then one can on a subsequent screen choose to adjust it for the amount previously reported.
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