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Tax Exempt Interest

When i add up my Form 1099's for Tax Exempt Interest, the amount does not agree to line 2a on my 1040-SR return.  Cannot find a reconciliation of the amount for line 2a, cannot find a form that shows a reduction in the amounts from the 1099.  The Form 1099's amount is higher than the amount on line 2a.  Befuddled!

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Accepted Solutions
M-MTax
Level 11

Tax Exempt Interest

However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a (that is, the excess of tax-exempt OID for the year over the amortized acquisition premium for the year). See Pub. 550 for more information about OID, bond premium, and acquisition premium.

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5 Replies

Tax Exempt Interest

Tax exempt interest is reported on the Form 1099-INT Line 8.  If you have more than one Form 1099-INT with tax exempt interest you need to create another Form 1099-INT.

 

Go to Forms mode.  When in Forms mode click on Schedule B to see how the interest is being reported.

M-MTax
Level 11

Tax Exempt Interest

However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a (that is, the excess of tax-exempt OID for the year over the amortized acquisition premium for the year). See Pub. 550 for more information about OID, bond premium, and acquisition premium.

Tax Exempt Interest

Also, Don't forget box 12 on any 1099-DIV form too...that Adds into line 2a of the 1040.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
rjs
Level 15
Level 15

Tax Exempt Interest

It's not clear whether you are adding up the box 8 amounts on the actual 1099-INT forms, or the amounts in TurboTax. If you are looking at the forms, double-check the entries in TurboTax. See if you made a mistake entering one of the amounts.


If you are using the CD/Download TurboTax software, you can open Schedule B in forms mode to see a list of the amounts that were entered. You can also look at the individual Form 1099-INT Worksheets.

 

Tax Exempt Interest

Thanks for the replies, but I found the problem in overlooking Bond Amortization actually reduced the reported Tax Exempt Interest.  Was looking for a reconciliation form that would be provided by Turbo Tax and when i did not find one i posted the question in haste.  Speaking of going to "View" i always use view and wish TT would provide a selection for that view to come automatically when i open my return.

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