How do I enter Accrued Interest paid on purchases?

Question

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 interest.

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?

Bill Brown · Accepted Answer

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.

ira smilovitz · Answer

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 of interest.

Ira Smilovitz Leonia, NJ

removeps-groups · Answer

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.

How do I enter Accrued Interest paid on purchases?

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