Additional 1099-Q Entries Required

[dcfowles]

I closed 21  529 plans for my grandchildren and need to list the 1099-Q on my tax return.  Turbo Tax only allows me to input 10 of the distributions.  How can I enter the rest of them?

[KrisD15]

To clarify, did you use the funds for education expenses or simply cashed them out?

Are all 1099-Q issued to your social security number? 

[dcfowles]

I cashed them out and all are issued to my SSN.

[KrisD15]

TurboTax only needs the numbers, the 1099-Q forms are not individually reported on a tax return, so I suggest you add Boxes 1,2 and 3 and enter as one for each payer. The account numbers don't matter. 

[dcfowles]

Kris,  First off, thanks for the quick responses!

To clarify, Turbo Tax basically has the 1099-Q form that I'm filling out with the acct number and the amounts for boxes 1,2, and 3.  Are you saying just to leave the acct number empty and combine all of the 1099-Q amounts into one or at least no more than the 10 forms/entries  that Turbo Tax allows?  

Also, I presume that TT will adjust so that I'm only paying taxes (and penalties) on the earnings, because it appears that the gross distribution is being included as income.

[KrisD15 · Accepted solution]

Yes, that is my suggestion.

I tested and no account number was required, if TurboTax shows that as an error, enter one of the account numbers in that space. This is only for a worksheet, so none of that information is relayed to the IRS. 

Since none was used for education purposes, you will be taxed on the total earnings.

That amount will be listed on Schedule 1 line 8z. (flows into the total reported on 1040 line 😎

You will also incur a 10% penalty tax on the earnings, that will be listed on your schedule 2 line 8. (flows into the total reported on 1040 line 23)

Sometimes TurboTax shows ALL your income, not just your TAXABLE income.

You can look at your 1040 to get a better idea of what the program is doing. 

For TurboTax Desktop, switch to Forms (top right) 

• 
  To View using TurboTax Online:
  Select Tax Tools on the left side-bar
  Select Tools from that drop-down
  Select “View Tax Summary” on the TOOLS CENTER screen
  Select “Preview my 1040” which now appears on the left side-bar
   

[Hal_Al]

The penalty will be reported separately on form 5329 and flows to line 8 of Schedule 2, then to line 23 of form 1040. 

[dcfowles]

Perfect.  Thanks much!