Forgot to enter Path2college 529 plan expense for laptop.

[Niyo1]

Submitted the fed and state return today. Just realized, forgot to add 529 expense towards laptop purchase. Hate turbotax did not prompt about the expense and path2college to not send tax form etc towards the qualified expense..should i amend return really? thanks

[KrisD15]

That depends, 

was any of the distribution taxed on your original return? 

Did you get an education credit? 

[Hal_Al]

To get to the computer cost screen, you must answer yes to the Book expenses question.

[Niyo1]

No education credit. Just this one distribution. As per 529 customer care, this is a qualified expense. Thoughts?

[Niyo1]

Can someone confirm if this is audit risk? Should I file amend? I have not done an amendment in turbotax in the past...

[Hal_Al]

@Niyo1 

You didn't answered the question: Was any of the distribution taxed on your original return?  If not, then claiming  additional expenses won't help you. There is no need to amend. 

There's no audit risk to overpaying your income tax

[Niyo1]

No it was not taxed. That’s the question I am asking should it be taxed? I missed entering & 529 plan did not send 1099-Q either :(

[Hal_Al · Accepted solution]

Q. That’s the question I am asking should it be taxed? 

A.  No, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) and computers to cover the distribution. 

You can just not report the 1099-Q, at all.  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 to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip! 

On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 

Yes, there is some audit risk.  But, we've noticed, here in this forum, that there has been less cases of IRS inquiries over 1099-Qs recently.