Solved: I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?
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dsmithh
New Member

I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?

 
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KrisD
Intuit Alumni

I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?

No, the beneficiary is the student listed on the savings account. Each account has an owner and a beneficiary. If any distribution is taxable, it is taxed to the person that made the distribution, so it is usually wise to have the student make the distribution, therefore the tax would be at the student's rate. Also, distributions may be made directly to the school in the student's name. Distributions must be made in the same tax year as the education expenses are paid for the distribution to be tax-free. 

CLICK HERE for IRS Pub 970 Education Credits


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KrisD
Intuit Alumni

I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?

No, the beneficiary is the student listed on the savings account. Each account has an owner and a beneficiary. If any distribution is taxable, it is taxed to the person that made the distribution, so it is usually wise to have the student make the distribution, therefore the tax would be at the student's rate. Also, distributions may be made directly to the school in the student's name. Distributions must be made in the same tax year as the education expenses are paid for the distribution to be tax-free. 

CLICK HERE for IRS Pub 970 Education Credits


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dsmithh
New Member

I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?

Do I deal with all higher education issues on my daughters returns? Tuition statements, Coverdell, Education IRA, etc? I only contributed to one Education IRA this year due to second daughter turning 18.
KrisD
Intuit Alumni

I have two daughters in College, For Education section, am I the beneficiary of a coverdell education savings account on my 1040?

If she is your dependent, you enter the information and apply for a credit. If there is any taxable income, it is usually reported on the student's return, if the distribution was made by her, or there is taxable scholarship amounts. Be sure to ENTER THE 1099-Q FIRST, AND THEN THE 1098-T. The program will tell you if there is anything taxable, and if so, who need to report it. Be sure to also look at the student's school account statement to see if anything billed in one year was paid in the following year. the credit is based on what was PAID in 2017.
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