Accrued interest adjustment in TurboTax needs fixing
TurboTax has an issue with its 1040 tax program that should be addressed. When one imports 1099-INT forms that have both taxable and tax exempt income and then makes an adjustment for accrued interest, the program allocates the adjustment to both taxable and tax exempt income on pro rata basis. This is going to give an inaccurate result. The program should allow for the entry of separate adjustments for taxable and tax exempt accrued interest. To address the issue now, one has to have a Form 1099-INT for taxable interest with its accrued interest adjustment and one for tax exempt interest with its adjustment. However, most taxpayers would likely be unaware of the necessity to do so. |