Tax exempt interest shows incorrectly on 1040

[Nitabai]

My 1040 shows a tax exempt interest amount of $9732 while my imported 1099 INT and the Interest worksheet show it as 18713. I called the TurboTax support number and shared my screen and the specialist was unable to figure out where the 1040 amount is coming from. My review shows no errors so I am ready to file, but dont want to file a return with an obvious error though tax exempt interest doesnt impact my taxes. This also makes me wonder if there are other errors. The TurboTax specialist has promised to get back but it appears there is a bug.

[KrisD15]

If possible, you should delete the imported 1099-INT and manually type it in to see if there clears up the error.

• To Delete a Form  using TurboTax Online:
  Select Tax Tools on the left side-bar
  Select Tools from that drop-down
  Select “Delete a form” on the TOOLS CENTER screen
  Select the form, schedule and/or worksheet you wish to remove, in your case the 1099-INT 
   

[Nitabai]

I dont want to delete a form and manually enter for following reasons:

1. I have multiple accounts with the same broker and trying to delete one form deletes all forms from the broker. I have the desktop version not the online version and I cannot use the exact steps you outline.

3. Turbotax guarantees correct returns - it should show correct data and not require manual manipulation. Their guarantee will be voided if I make manual changes.

[MayaD]

We would like to take a deeper dive into this message to assist you. In order to do this, it would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information.

To do that:

1.Go to the black panel on the left side of your program and select Tax Tools.
2.Select Tools below Tax Tools.
   A window will pop up which says Tools Center.
3.On this screen, select Share my file with Agent.
   You will see a message explaining what the diagnostic copy is. 

4.Click okay through this screen and then you will get a Token number.
5.Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

In TurboTax Desktop:

1. Switch to interview mode in TurboTax.
2. Go to any screen except the Welcome screen.
3. From the menu, select:
   • Online if you are on a PC.
   • Help if you are on a Mac.
4. Select Send Tax File to Agent.
   • You will be notified that all personally identifiable information (PII) is being removed.
5. The seven-digit token number will appear.

[Nitabai]

I have the desktop version of TurboTax premium.  There is no black left panel with Tax Tools. Instead I went to top black panel and chose the Online Menu and selected Send Tax File to Agent and got the code 1205737. Please help explain why the 1040 amount for Tax exempt interest is shown as $9732, when the 1099-INT shows it as 18713. The case I logged with phone rep was closed without resolution. I was advised to reimport 1099s or manually adjust amount. I dont want to do that as that requires me to delete multiple 1099s from the same broker and I will then have to rework on all of them. Also Turbotax guarantees taxes will be done right, so I dont want to make manual adjustments to imported data.

[MayaD]

I checked your tax file to make sure no adjustment was made to the exempt -int amount which could be the reason why the amount is different on form 1040. I tested the issue by reporting another 1099-INT with amount in box 8, the full amount carried over to form 1040. 

I would recommend as Kris mentioned to delete the 1099-Int and enter it manually. Entering the form manually(not overriding the amount) will not void TurboTax Guarantee. 

How do I delete a tax form in TurboTax Desktop?

When reentering form 1099-INT, select I'll type it myself. Enter amounts as reported on your form. 

[Nitabai]

Can I overwrite the amount of tax exempt interest only without deleting and reimporting the form? I have 3 accounts with the broker and TurboTax deletes all 3 1099s. It doesnt allow me to delete just one. This is not god as then I have to do the foreign tax entries all over again.

Your response does not explain why Turbotax has the wrong amount for tax exempt interest in the first place, when you guarantee taxes done right each time?!

[flyerii]

I have the same issue.  I only have 1 1099-INT with tax-exempt interest.  That amount is $1485.  It is showing up as $2818 in line 2a of Form 1040.

[KeshaH]

If you'd like, we can look at your return and see exactly what you see to  help come to a resolution. The return will be scrubbed and won't include any of your personal details.

If you're using TurboTax Online:

Once you're logged in to your account,

- on the left hand panel, click on Tax Tools and then choose Tools

- on the pop up window, select Share my file with Agent

- you'll see a message saying you'll give us a copy of your tax return. Your personal information will be changed so we can't see any private information.

- click okay and you'll get another message with a token

If you're using TurboTax Desktop:

• Click on Online in the top menu of TurboTax Desktop for Windows
• Select 'Send Tax File to Agent'
• Write down or send an image of your token number and state then place in this issue.
• We can then review your exact scenario for a solution

Please reply to this message with your token so that we can further assist you. Let us know all other states, if any, that are included on the return.

[flyerii]

State is NJ

[flyerii]

The calcuation that TT is doing appears to be:
(Line 8 of 1099-INT) - (Line 13 of 1099-INT) + (Line 12 of 1099-DIV).  

It does not seem to be accounting for (Line 11 of 1099-OID).

[KeshaH]

Thank you for sharing your token.

You're correct that the $2,818 showing as tax-exempt interest is your tax-exempt interest + exempt interest dividends - bond premium. 

The reason that your tax-exempt OID from box 11 of form 1099-OID isn't included is because that amount is offset by the premium in box 6 of the 1099-OID. Since they're both the same amount after rounding, it washes.

[flyerii]

Thank you Kesha.  I think I understand.  But just so that it is clear for me -- is the formula for Line 2a:

(Line 8 of 1099-INT) - (Line 13 of 1099-INT) + (Line 12 of 1099-DIV) + (Line 11 of 1099-OID)  - (Line 6 of 1099-OID)

[KeshaH]

That's correct!

If you had any tax-exempt interest on a Schedule K-1 (from a partnership, S corporation, estate, or trust) that would also be included in this formula. 

[flyerii]

Thank you so much for your help and the very clear explanation.