Line 2a Tax Exempt Interest does not follow from supporting data and worksheets

Forum|Forum|6 years ago
March 1, 2020
2 replies
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I've seen other questions on this issue but mine does not match the circumstances in those. I'm seeing a value on line 2a of Form 1040 that is $10 higher than the actual amount of tax exempt interest received this year. When I zoom into the entry on the 1040, it brings me to the underlying worksheet, which also shows the same figure ($10 higher). When I then zoom into *that* entry, it takes me to the Schedule B worksheet with the only entry for tax exempt interest being the correct figure ($10 less than what is showing on line 2a of Form 1040).

And to head off guidance I've seen about this issue already, yes, I also have tax-exempt dividends (line 10 on 1099-DIV), but that figure is way over the $10 discrepancy I'm seeing.

I intend to file electronically, so I can't just override that value, unfortunately, otherwise I'd be fine doing so, but I hate being in a position where my return is incorrect, even though the error is neither material nor consequential.

TurboTax Basic Windows

Best answer by SteamTrain

Well...what you can do is delete the schedule B entirely, Check the line 2a to make sure it's empty. Then re-enter all 1099-INT, 1099-DIV and 1099-OID forms you have and see what happens.

IF no 1099-OID forms, or forms k-1 entered, then line 2a of the 1040 is the total of all (1099-DIV box 11), plus (1099-INT, box 8 minus box 13, minus accrued exempt interest ). Those two minuses for the 1099-INT are sometimes missed by people, but that would result in line 2a of the 1040 being lower they expect.

SteamTrain

Employee

Tax-exempt dividends on a 2019 1099-DIV is in box 11, not 10. ( Box 10 was last used in (2015?...2013?) )

So if you have $10 in box 11 of the 1099-DIV , then that's it.

__________________________

additional $$ Line 2a of the 1040 can also come from a box 11 entry on a 1099-OID .

Can also come from a form K-1(if you had one...not sure which box))

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

bhernAuthor

Apologies, mistyped the box on the 1099-DIV form. I meant Box 11 -- Exempt-Interest Dividends. And no, I do not have $10 in that box or on any box on that or any other 1099/K-1 that would explain the difference. My total of exempt-interest dividends on my various 1099-DIV forms is much more than $10, so if line 2a is supposed to contain all elements of tax-exempt earnings in terms of interest AND dividends, TurboTax is not pulling that together accurately.

SteamTrainAnswer

Employee

Well...what you can do is delete the schedule B entirely, Check the line 2a to make sure it's empty. Then re-enter all 1099-INT, 1099-DIV and 1099-OID forms you have and see what happens.

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

somebody2017

had some tax exempt interest on 1040 Line 2a $848 that I couldn't figure out. I clicked on it to be taken to the source... and went to the intetest income smaret worksheet Schedule B, Nothing was there . Then right clicked on the 1040 Line 2a block and read the DATA SOURCE.
Which said:

"1040/1040SR Wks : Tax Exempt Interest

From Interest Income Smart Worksheet (Schedule B), tax exempt interest, plus
Exempt-Interest Dividends Smart Worksheet (Schedule B), plus
tax-exempt interest from Schedules K-1 for Partnerships, S Corps, and Estates & Trusts,
MINUS
adjustments to tax-exempt interest from Forms 1099-INT and 1099-OID Worksheets"
So I checked all those smart worksheets and K1s... and saw NOT one cent of tax exempt interest.

So I went to Tool>My Tax Data, and started scrolling through... looking for that $858 (really, there's no "search" tool to find a number in my return... big lack!). And didn't find $858. But I DID find $857.66. and went to that, and found a 1099-Div that I had IMPORTED, that had, in Box 11 Exempt-interest Dividends, that $857.66

So I asked myself, WHY didn't that show up in the smart Dividend worksheet? So I right clicked on that line, and selected About Box 11.

And here's what I read:

"EXEMPT-INTEREST DIVIDENDS:

Use Form 1099-DIV Worksheet to enter exempt-interest dividends, which are income dividends paid to you from a mutual fund or other regulated investment company earned on federally tax-exempt securities, such as state municipal bonds.

Exempt-interest dividends will NOT be listed on Schedule B, but will be included on Form 1040, line 2a as tax-exempt interest."

So, thanks a lot Turbo Tax for bum doping me about the source of data of 1040 Line 2a. Your go to source function doesn't take me to all the sources, and your Data Source guidance about the block is incomplete.

ANOTHER hour spent on my tax return I'll never get back. Hopefully, this will help others find the hidden sources of the numbers that Turbo Tax fails to mention in their Data Source for Box 2a... as well as some ways for looking for the information (don't forget the numbers are rounded on some forms, and not on others... What would be REALLY helpful in trying to track down random numbers with no apparent source would be if I could enter a number like 858 in a search field and have the option of selecting to search for any number that would round to 858 anywhere in my return, worksheets, or supporting documents....hint hint, TurboTax.