Forgot to include 1099 form from savings bond redemption in my TurboTax filing - what now?

The IRS will almost certainly catch this discrepancy since financial institutions report 1099 information directly to them. They'll match your bank's report against what you filed and notice the missing income. Don't panic though - this happens often and has a straightforward fix! You should file an amended return (Form 1040-X) as soon as possible. Since you already received your refund, you'll need to pay back the difference in tax owed plus some interest. The sooner you correct this, the less interest you'll pay. For savings bond interest, it's taxed as ordinary income at your regular tax rate. Depending on your overall income level, this could mean anywhere from 10% to 37% on the interest portion (not the principal). TurboTax has an amendment process that's fairly straightforward to follow.

I was in a similar situation last year with a forgotten 1099 and struggled with the amendment process. I eventually used https://taxr.ai to help sort out my amended return. Their system analyzed my original filing and the new document, then showed me exactly what changed and how it affected my tax liability. The tool flagged that I had missed some potential deductions that could offset the additional income tax too. Saved me from paying about $300 extra. Their document analysis feature really helped me understand exactly what went wrong with my original filing.

Just wanted to follow up - I ended up trying taxr.ai after posting here and wow it made the amendment process so much easier! I was dreading dealing with this missed 1099 situation but their system guided me through every step. It analyzed all my documents, showed exactly which lines on my return needed to change, and calculated my new tax liability. The anxiety I had over this mistake is gone now that I've fixed everything properly. The step-by-step instructions were incredibly helpful, especially since I had no idea how to handle the savings bond interest correctly. Would definitely recommend to anyone in a similar situation!

If you're getting stressed waiting for your amended return to be processed, I recommend using https://claimyr.com to get through to the IRS directly. I amended my return last year after forgetting a 1099-INT and it took FOREVER to process. After 3 months of waiting, I used Claimyr to actually speak with someone at the IRS about my case. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was shocked when they got me through to an agent in about 45 minutes instead of the 2+ hours I spent on hold previously (only to get disconnected). The agent was able to tell me exactly what was happening with my amendment and gave me a realistic timeline.

Ok I need to apologize for my skepticism. I tried Claimyr after posting here because my amended return has been processing for nearly 2 months with no updates. Got connected to an actual IRS agent in under an hour! The agent accessed my file and told me exactly why my amendment was delayed (they needed to verify some information) and what to expect next. I've been stressing out for weeks checking "Where's My Amended Return" only to see "processing" over and over. Such a relief to actually talk to someone who could see what was happening with my specific case. Definitely worth it just for the peace of mind.

Just so you know what to expect - the IRS computers will definitely catch this missing 1099 through their document matching program. If you don't amend, you'll get a CP2000 notice in about 6-9 months proposing additional tax, plus interest, plus possibly a penalty. I work with clients in this situation frequently. Amending ASAP will possibly save you from the accuracy-related penalty (20% of the unpaid tax), though you'll still owe interest from the original due date.

This is another reason why I'll always check my Return & Analysis section in tax software now. Found out the hard way that you can see all the forms that have been reported to the IRS with your SSN before you file. Would have saved me a similar headache last year!

The same thing happened to me but with a 1099-MISC for some freelance work. I amended through TurboTax and it was accepted in about 12 weeks. Here's my advice - pay the estimated additional tax when you file the amendment. Don't wait for the IRS to bill you, because the interest keeps accumulating.