How to use my 529?

[TimAskingQuestions]

Hi Everyone - 

Thanks in advance for helping with my question.  I am the owner and beneficiary of a 529 account, and would like to begin using it to pay for my grad school expenses.  The 529 account size is only ~4.5k relative to the total expenses which exceed 100k.  

My question is very basic - how do I mechanically distribute these funds to myself / my landlord to pay rent (within the monthly limit provided by the school to the DoE as the cost of attendance)?  Can I simply setup a withdraw and have a check sent to my landlord?  Will this "screw up" anything on the backend when I file my 2021 taxes?  I believe the distribution will trigger at 1099Q which will then be the way I answer my questions in TT.  

Thank you,

Tim

[MarilynG1]

As long as your 529 funds are used to pay 'qualified education expenses' (which include room and board) how you set that up to be paid is up to you.  Making an arrangement with the bank for a monthly distribution for housing sounds like a viable option.  Be sure to keep records for yourself, however. 

When you receive your 1099-Q, if the Total Distribution is less than your Education Expenses (less any Scholarships/Grants), you are not required to enter your 1099-Q into TurboTax.

Click this link for detailed info on the 1099-Q.  

[Hal_Al]

You do not have to literally pay expenses with the actual 529 funds.  All you have to do is to have paid qualified expenses in the same  year of the distribution (withdrawal) of funds. 

Just have the 529 plan send the money to your regular checking account and pay your bills as you normally do.