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Integration with GoSystem Tax RS

Form 1099-INT Box 13: Bond Premium on Tax Exempt Bonds in GoSystem Tax RS

Box 13 - Bond Premium on Tax-Exempt Bond
 appears on Form 1099-INT. The bond premium reported on Box 13 will be adjusted against Tax-exempt interest – Box 8.
Since Box 13 will be adjusted against Box 8 – Tax-exempt interest income, SurePrep will determine the state taxable and nontaxable portion of the total income and then based on security description matching, SurePrep will adjust the Box 13 amount against it.
  • If the user has opted to allow the system to enter all the tax-exempt income as state nontaxable by default, the system will consider the entire Box 13 - bond premium on tax-exempt bond as state non-taxable.
  • If the user has opted to allow the system to enter all the tax-exempt income as state taxable by default, the system will consider the entire Box 13 - bond premium on tax-exempt bond as state taxable.
  • If the user has opted to allow the system to automatically determine the state taxability of all the tax-exempt income, based on the matching of state abbreviation present in security descriptions (if available), the system will determine the taxable and nontaxable portions of the income as well as the bond premium that will need to be adjusted.
Reporting of Box 13 in GoSystem Tax RS by SurePrep:
We will use the example below to demonstrate how SurePrep reports the Box 13 amount in GoSystem Tax RS.
Example:
State non-taxable income (Box 8): $ 5,000State taxable income (Box 8): $ 2,500State non-taxable Bond premium amortization (Box 13): $ 500State taxable Bond premium amortization (Box 13): $ 250
Irrespective of the input section the user chooses (1099-Consolidated or 1099-INT):
  • System will populate the total amount of Box 8 and Box 13 in their respective fields in GoSystem Tax RS.
System will populate the state taxable portion of Box 8 as a positive and the state taxable portion of Box 13 as a negative amount in the State Tax Exempt Interest section in GoSystem Tax RS.
Tax Treatment of Box 11 (Bond Premium) by SurePrep:
  • System will populate the amount of Box 11 in the tax software in its respective field.
  • System will not match the detail of Box 11 with the detail of Box 1 and Box 3 because next year the IRS is going to provide a separate line for Bond premium for Box 3 also.
  • Occurrence of Box 3 is less as compared to Box 1, hence if in either of the box the amount is available, tax software will provide the proper tax treatment for Box 11 and deduct the amount from respective box.
  • When amount of Box 1 and Box 3 are both available and the amount in Box 11 is also available, system will provide a diagnostic such as "Tax Software will proportionate the amount of "Box 11: Bond Premium", based on the income available in "Box 1: Interest Income" and "Box 3: Interest on US Obligation" of this account. Please match the description of Box 11 and correct the input."
  • For 1099 INT, detail information will not be available so no need to generate a diagnostic for Form 1099-Int.
Tax Treatment of Accrued Interest Paid by SurePrep:
  • System will capture the data of Accrued Interest Paid by matching the security description with interest income of Box 1 (Interest Income), Box 3 (US Obligation), Box 8 (Tax Exempt Income) and Box 9 (Specified Private Activity Bond).
  • If security description of Box 1, Box 3, Box 8 and Box 9 of interest income matches with the security description of Accrued Interest paid only then will the system create a new entity by showing the amount of Accrued Interest paid as a negative in its respective box.

This article applies to:

  • Product: SurePrep
  • Subject: Integration
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