-My Oldest files on his own starting a couple of years ago. Graduated college May 2023
-I Rec’d 1099-Q for funds we took from his 529 to reimburse me for expenses I covered.
-I’m claiming it on my return but it is taxing me on the amount we puled out even though it was a reimbursement for college expenses
-Am I doing this correctly or am I missing something here?
Q. Am I doing this correctly or am I missing something here?
A. You're doing it incorrectly, since " the amount we pulled out ... was a reimbursement for college expenses".
You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records. You would still have to do the math to see if there were enough expenses left over for you (or the student, on his own return) to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip!
References:
The interview is complicated (although less complicated when the student is not your dependent). If you're not getting the answer, you know to be correct, just delete the 1099-Q.
Just so I understand, I don't need to report the 1099-Q because the amount in box 1 is significantly lower that actual expenses for college? The amount paid to me was to reimburse me for some of the college expenses.
Q. Just so I understand, I don't need to report the 1099-Q because the amount in box 1 is significantly lower that actual expenses for college?
A. Yes.
That assumes there was no duplicate allocation of those expenses for other tax benefits. That is, the student didn't use the same expenses to claim a tax credit or claim that his scholarship was tax free.