My 1098-T Form is missing Room & Board expenses.

[42baker--]

Nevemind. I found it. Thanks for noting it.

[TaxHelpNeeded3]

Can you say where you found the answer 42baker? I have the same issue.

[chilityler]

I have similar situation and I don't know how to file my tax to avoid mistake being tax or get 10% penalty.

My son is full time college and I claim him as dependant:

1098-T is under his name:

1098-T box 1 $11,000

1098-T box 5 $14,000

1099-Q to my name become distribution sent to me who pay room and board for my son = 3000

1099-Q box 1= 1700

1099-Q box 2= 1300

Room and Board (I paid) = 10,500

He got another scholarship but we did not get 1098-T = $4000

how do I file my return w/o getting penalty? Currently, I did something wrong that why my 1099-Q box 2 of 1300 is listed as taxable income.  I don't see any box for me to list the actual room and board expense as qualified expense, that cause my distribution subject to tax. Please help.

[Hal_Al]

@chilityler Just don't enter the 1099-Q, since you know you have more than enough expenses to cover it ($10,500 > $1700).  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. 

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." 

_________________________________________________________________________________________

Two other issues you don't mention: 1. Are you eligible to claim the American Opportunity Credit (AOTC) and 2.  your son has taxable scholarship that may have to be reported, on his tax return.

You may claim the AOTC even though all your son's expenses were covered by scholarship. 

There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $18,000 in box 5 of the 1098-T and $11,000 in box 1. At first glance he has $7000 of taxable income and nobody can claim the American opportunity credit. But if he reports $11,000 as income on his return, the parents can claim $4000 of qualified expenses, for the AOTC,  on their return.

Books and computers are also qualifying expenses for the AOTC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket, he would only need to report $10,000 of taxable scholarship income. 

[chilityler]

Thanks Hal-Al for prompt response.

Let me get into more detail. 

My son got two separate scholarships but only one sent 1098-T to him annually. One is for $14K/year, other is $4500/year but never send any document. The total scholarship amount I put in original amount is actually the combination of the two (even though we got 1098-T from only one place for $14k).  I take his total expenses (tuition, room and board), then subtract from total of two scholarship, the difference is the amount I got reimbursed from 529 funds which I received the 1099-Q since I am the owner but he is the benefit. The bottom line, they net out zero. 

Question 1: so it is safe for me not to report any of those forms in 2020 TT filing if I know they net out zero? I have detail file that list all expenses and back-up receipt.

Question 2: he has some small income from working reported on his W2 less than $3000.  Even I claimed him on my joint-married filing, should I do another separate filing on 1040 EZ form for him? Will he get any benefit?

Question 3: I haven't checked out other credit yet since I don't think I will be qualified cause my AGI is over $190K. Am I wrong?  

Question 4: how do I know if his scholarship is taxable? this is his second year and his school just sent 1098-T with box 1 and 5 as I provided earlier. Nothing else. 

[Hal_Al]

Question 1: so it is safe for me not to report any of those forms in 2020 TT filing if I know they net out zero? I have detail file that list all expenses and back-up receipt.

A1. Yes, it safe for YOU to report nothing, about education, on your tax return.  Keep your back up receipts. 

Question 3: I haven't checked out other credit yet since I don't think I will be qualified cause my AGI is over $190K. Am I wrong?  

A3.  You are correct, you do not qualify for tuition credit or deduction, because of your income.

Question 4: how do I know if his scholarship is taxable? 

A4. Although room and board are qualified expenses for a 529 distribution, they are not qualified expenses for scholarships to be tax free (or for a tuition credit).  He has taxable scholarship because $14,000 + 4500 = $18,500  is more than his $11, 000 of qualified expenses (books and computers are also qualified expenses).

Question 2: he has some small income from working reported on his W2 less than $3000.  Even I claimed him on my joint-married filing, should I do another separate filing on 1040 EZ form for him? Will he get any benefit?

A2.  He has $3000 wages  + $7500  scholarship = $10,500 total reportable income. Since that is less than the $12,400 filing requirement*, he does not need to file.  He would get no benefit from doing so (unless there was withholding in box 2 of the W-2 to be refunded).  He is not eligible for a tuition credit or deduction, because he is a dependent (and other reasons).

*If he had other unearned income (interest, dividends, capital gains, unemployment) the filing threshold is lower. 

[chilityler]

Let me verify one more time:

1.So on my joint-married filing, my college son is still be claimed as my dependent and I don't have to include his W2 income, correct? I don't need to list 1098-T and 1099-Q either since I know total distribution were used toward qualified expenses under 529 plan. Correct?

2. In addition, I can do a separate filing (on 1040EZ) to list his W2 (less than $3000) and report his 1098-T document where he has  $14K scholarship, less $11K tuition. We never get any document of the second scholarship $4500, should we include in his filing? The difference between total two scholarship and the tuition is $7500 that was paid to R&B ($10,500). The balance of $3000 were paid by 529 plan under my filing, no need to mention on his filing right? Since his wage and taxable scholarship $10,500 is less than filing threshold, then he might get refund for taxes withdraw on his W2. Correct?

[Hal_Al]

Q. So on my joint-married filing, my college son is still be claimed as my dependent and I don't have to include his W2 income, correct?

A. Correct. A dependent's income (almost) never goes on the parent's tax return.

Q. I don't need to list 1098-T and 1099-Q either since I know total distribution were used toward qualified expenses under 529 plan. Correct?

A. Correct.  And, you know you are not eligible for a tuition credit or deduction.

Q.  In addition, HE  can do a separate filing to list his W2 (less than $3000) and report his 1098-T to  document that he has  $3K taxable scholarship ($14K scholarship, less $11K tuition).

A. Yes.  There is no more form 1040EZ (or 1040A). Everybody uses 1040.

Q.  We never get any document of the second scholarship $4500, should we include in his filing? 

A.  Yes, document or not, it's still income.  You can just enter $18,500 in box 1 of the 1098-T screen for simplicity.

Q. The balance of $3000 were paid by 529 plan under my filing, no need to mention on his filing right? 

A. Right.  You (and he) don't need to account for what you used the $3K difference for.  He just needs to call it taxable scholarship. 

Q. Since his wage and taxable scholarship $10,500 (total) is less than filing threshold, then he might get refund for taxes withdraw on his W2. Correct?

A.  There's no "might". If there's an amount in box 2 of the W-2, that will be refunded. If there's nothing in box 2, don't bother to file. He cannot get the box 4 or box 6 amounts refunded.  If there's an amount in box 17, he might get that refunded depending on what your state's tax structure is. Most, but not all, states follow federal.