I won't be paying tax no matter how I do this; I just want to do
whatever will make the IRS happiest.
I got a 1099INT that has taxable interest, treasury interest, and
municipal interest. There is accrued interest on the treasury
H&R At Home says it will divide the accrued interest between the three
categories unless I enter three 1099INTs, one for each kind of
interest, and put the accrued interest with the right one. I can do
that, but am concerned the IRS won't like it when my 1099INTs are
different than theirs.
As I said, I don't pay tax either way. Do I do it as 3 1099INTs or
get HRAH allocate it improperly?
You're 1099 INTs will not be reported with a difference from the copy
sent to the IRS, if H&R at Home's tax software works properly.
I've never used that program nor have I bothered to determine whether
there are any independent reviews of that product. Therefore, I offer
no opinion on its reliabililty.
You can do it as two or three 1099-INTs - you only need to separate the interest
which has the accrued interest. The IRS computers will match the interest
amounts by payer and category, and not look for a single 1099 for all categories
I think the IRS computers only match the total of 1099-INT reported to
them to that reported by you. So if you need to split into three
because of limitations of your software then go for it. You can eFile
without providing the EIN number of the bank that gave you the
interest, so there's no way for the IRS computers to match it anyway.