Reporting tax-exempt interest incorrectly



  • I just found out for years 2013, 2014 and 2015 I entered tax-exempt interest incorrectly on Form 1040 ( from Schedule B ) while it was reported (calculated) correctly on Schedule B. This interest had no effect on the amount of tax I owed to IRS for those years. Should I ignore or file amendments?

    I just found out for years 2013, 2014 and 2015 I entered tax-exempt interest incorrectly on Form 1040 ( from Schedule B ) while it was reported (calculated) correctly on Schedule B. This interest had no effect on the amount of tax I owed to IRS for those years. Should I ignore or file amendments?


     


  • @richard This answer is worth exactly what you’re paying for it, and is predicated on two things:

    1. You have not had a long, drawn out fight with the IRS, and
    2. There is nothing else wrong with your 2013 - 15 forms.

    File amended returns.

    @richard This answer is worth exactly what you’re paying for it, and is predicated on two things:

    1. You have not had a long, drawn out fight with the IRS, and
    2. There is nothing else wrong with your 2013 - 15 forms.

    File amended returns.



  • You report tax-exempt interest on Line 8b of Form 1040. You don’t report it on Schedule B at all.

    You report any adjustments to gain or loss on bonds from Form 8949 column (g) on Schedule D column (g) and on Schedule B as Accrued Market Discount as a positive number underneath your other entries for taxable interest. You report Accrued Interest that you paid on taxable bonds as a negative number on Schedule B.

    You report tax-exempt interest on Line 8b of Form 1040. You don’t report it on Schedule B at all.

    You report any adjustments to gain or loss on bonds from Form 8949 column (g) on Schedule D column (g) and on Schedule B as Accrued Market Discount as a positive number underneath your other entries for taxable interest. You report Accrued Interest that you paid on taxable bonds as a negative number on Schedule B.



  • @gwraigty said in Reporting tax-exempt interest incorrectly:

    You report tax-exempt interest on Line 8b of Form 1040. You don’t report it on Schedule B at all.

    You report any adjustments to gain or loss on bonds from Form 8949 column (g) on Schedule D column (g) and on Schedule B as Accrued Market Discount as a positive number underneath your other entries for taxable interest. You report Accrued Interest that you paid on taxable bonds as a negative number on Schedule B.

    I had entered correct amounts on Schedule B but my spreadsheet transferred incorrect amounts to Line 8b of Form 1040 (because of an outdated incorrect formula I had entered in the cell for Line 8b of Form 1040).

    @gwraigty said in Reporting tax-exempt interest incorrectly:

    You report tax-exempt interest on Line 8b of Form 1040. You don’t report it on Schedule B at all.

    You report any adjustments to gain or loss on bonds from Form 8949 column (g) on Schedule D column (g) and on Schedule B as Accrued Market Discount as a positive number underneath your other entries for taxable interest. You report Accrued Interest that you paid on taxable bonds as a negative number on Schedule B.

    I had entered correct amounts on Schedule B but my spreadsheet transferred incorrect amounts to Line 8b of Form 1040 (because of an outdated incorrect formula I had entered in the cell for Line 8b of Form 1040).



  • @honkinggoose said in Reporting tax-exempt interest incorrectly:

    @richard This answer is worth exactly what you’re paying for it, and is predicated on two things:

    1. You have not had a long, drawn out fight with the IRS, and
    2. There is nothing else wrong with your 2013 - 15 forms.

    File amended returns.

    I have not received any notices/communications from IRS so far and I keep sending them big, fat checks quarterly. Amending years 2013-2015 will result in 0 additional tax benefits to me or IRS. It could only affect ATM calculations (I am not subject to) and some Modified AGI calculations (not changing my current status or rates).

    @honkinggoose said in Reporting tax-exempt interest incorrectly:

    @richard This answer is worth exactly what you’re paying for it, and is predicated on two things:

    1. You have not had a long, drawn out fight with the IRS, and
    2. There is nothing else wrong with your 2013 - 15 forms.

    File amended returns.

    I have not received any notices/communications from IRS so far and I keep sending them big, fat checks quarterly. Amending years 2013-2015 will result in 0 additional tax benefits to me or IRS. It could only affect ATM calculations (I am not subject to) and some Modified AGI calculations (not changing my current status or rates).



  • Then I probably wouldn’t bother to amend.

    Then I probably wouldn’t bother to amend.



  • I had entered correct amounts on Schedule B

    So if you entered on Schedule B, didn’t you pay taxes on it?

    but my spreadsheet transferred incorrect amounts to Line 8b of Form 1040 (because of an outdated incorrect formula I had entered in the cell for Line 8b of Form 1040).

    Who does spreadsheet these days - get the tax software and save yourself headaches.

    I had entered correct amounts on Schedule B

    So if you entered on Schedule B, didn’t you pay taxes on it?

    but my spreadsheet transferred incorrect amounts to Line 8b of Form 1040 (because of an outdated incorrect formula I had entered in the cell for Line 8b of Form 1040).

    Who does spreadsheet these days - get the tax software and save yourself headaches.



  • @principalmember said in Reporting tax-exempt interest incorrectly:

    Who does spreadsheet these days - get the tax software and save yourself headaches.

    I use a spreadsheet throughout the year to make sure we’re on track to be where we want to be at the end of the year. For filing, I use the Free Fillable Forms and makes sure that both the spreadsheet and the forms agree.

    After Turbo Tax messed up our taxes 2 years in a row because of errors in how they were handling company HSA contributions (a search of the boards at the time showed that everyone with an HSA was had this issue), I decided not to trust tax software anymore. Maybe short-sighted, but after doing my own taxes since back in the day when your only option was using pencil and paper forms, it feels much more natural to me than using a question/answer format in software.

    @principalmember said in Reporting tax-exempt interest incorrectly:

    Who does spreadsheet these days - get the tax software and save yourself headaches.

    I use a spreadsheet throughout the year to make sure we’re on track to be where we want to be at the end of the year. For filing, I use the Free Fillable Forms and makes sure that both the spreadsheet and the forms agree.

    After Turbo Tax messed up our taxes 2 years in a row because of errors in how they were handling company HSA contributions (a search of the boards at the time showed that everyone with an HSA was had this issue), I decided not to trust tax software anymore. Maybe short-sighted, but after doing my own taxes since back in the day when your only option was using pencil and paper forms, it feels much more natural to me than using a question/answer format in software.



  • A taxpayer is under no legal obligation to file an amended return to correct an error in a previously filed return for an open year.

    A taxpayer is under no legal obligation to file an amended return to correct an error in a previously filed return for an open year.


 

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