1099Q

[Wjgsj10]

Want to pay only for the gains on a closed 529 account.  I can get it to where I’m not getting the 10% penalty but I’m still paying more is it going to my income? Any suggestions  on how to enter?

Box 1. 45644.24

Box 2. 21499.78

[KrisD15]

How much was the distribution?

Did you get Form 1098-T? 

If yes, what is in Box 1 and Box 5?

Did you enter the 1099-Q and then the 1098-T into the program?

If yes, what did the program do with them? (Did it tax and if yes, how much?)

When a distribution is taxable, the tax is only on the earnings. 

You should only see up to 21,500 (rounded) as income on Schedule 1 Line 8z.

[Hal_Al]

If you closed the account, without any of the money going to qualified educational expenses, the entire box 2 (gains) amount is taxable and also subject to the 10% penalty. 

You say "I can get it to where I’m not getting the 10% penalty".  What makes you think you're not subject to the penalty?  

What ever you did to make that happens is probably interfering with a correct calculation of the taxable amount (which is $21,500 rounding). 

Q.  Is it going to my income?

A. $21,500 should go to line 8z of Schedule 1 with the notation "Qual state (or private) tuition prgm from 1099-Q"

Q.  Any suggestions  on how to enter?

A. You enter the 1099-Q. When asked who is the student, you answer "the distribution was not used to pay any educational expenses" 

[Wjgsj10]

Sorry did not enter all info. Received a scholarship for majority of the educational expenses (reason we took out leftover funds) 

I believe I’m not subject to the 10% penalty if i received a scholarship 

[Wjgsj10]

Sorry did not enter all info. Received a scholarship for majority of the educational expenses (reason we took out leftover 520 funds) 

I believe I’m not subject to the 10% penalty if i received a scholarship.  I did receive the 1098-T.  Box 1. 17,274.00 and Bix 3. 8,810.00 but part of the Box one is a employer contribution scholarship 

[Hal_Al]

Here's quick workaround in TurboTax:

Enter the 1099-Q. When asked who the student is answer: someone else not listed here (lying to TurboTax to get it to do what you want does not constitute lying to the IRS).  Enter the student's name when asked.  A few screens later, you'll get one simple screen to enter expenses. Press Done at the 1099-Q summary screen, to get there. Enter  $45,644 or more of expenses. Also enter $45,644 for  the scholarship in the box "Tax-free assistance".  This reports the earnings as taxable and claims the scholarship exception. You do not have to deal with the complicated “Educational expenses and Scholarships” (1098-T) section later. TT will prepare form 5329 to claim the penalty exception. 

[Wjgsj10]

Thank you! I did enter that in that way just seemed like my portion to pay was higher than just the taxable $21000.00 but I will try again thank you 

[Hal_Al]

 " I did enter that in that way just seemed like my portion to pay was higher than just the taxable $21,500."

That sounds like you entered the wrong number in box 2 at the 1099-Q screen.  The taxable amount can't be more than what's in box 2.