1099-Q

[GinetteC]

I have one 1099-Q form from the IRS that has 16 different account numbers. TurboTax Online will only allow me to enter 10 account numbers before it bounces me out and says I'm all done. How can I add the additional 6 accounts?  

[Hal_Al]

The 529 Plan account number(s) is not needed to file your tax return. Leave them off. 

[GinetteC]

Good morning.  My apologies for the bad wording in my question.  Please let me try again.  I have one 1099-Q with 16 line items, all with different fund numbers, gross distribution, earnings, and basis amounts.  The Turbo Tax software allows me to enter a maximum of 10 line items only.  Once the 10 line is entered, the system doesn't give me an error, it just won't allow me to enter the additional 6 entries from my 1099-Q.  Looking at the attachments, it shows 10 out of 10 lines used but again, I have a total of 16 lines to enter.

I've tried both the online and desktop versions of the software with the same results.  Customer Service call 1 says I need to manually handwrite my information on forms and mail it in.  Customer Service call 2 says this is not a software issue even though there is no documentation anywhere that I can only enter 10 line items.  Customer Service call 3 says it is a software issue that has been known for over a year but was not resolved.  She said I should be able to enter all 16 line items into Turbo Tax with no issue but saw for herself that the system doesn't allow it.  She said it may or may not be fixed before my taxes are due.

I'm not sure what to do at this point.  Should I enter the initial 10 lines into Turbo Tax and add 6 paper forms (OMB No. 1545-1760) to cover the additional 6 line items and then mail everything in?  This is so frustrating.  Thank you for your quick reply.

[Hal_Al]

What you are saying still isn't clear. The term "16 line items" doesn't make sense.

It sounds like your fund administrator is trying to report multiple separate  distributions on one 1099-Q. 

What's on your 16 line items? Do not provide personal info like name address or SS#.

Here's what a 1099-Q looks like: https://www.irs.gov/pub/irs-pdf/f1099q.pdf

[Hal_Al]

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. 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 cannot double dip!  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." 

[GinetteC]

My apologies that I'm confusing you. 

There were no expenses or monies withdrawn from any of the accounts.   All we did is roll/transfer four 529 accounts for our 4 grandchildren from one financial institution (American Funds) to another (Fidelity). 

The original institution, American Funds, sent us one 1099-Q with 16 entries for the 16 funds we rolled over to Fidelity:

  -  Our 3 granddaughter's accounts have 5 funds each (shows as 15 lines on the 1099-Q). 

  -  Our grandson has 1 fund (shows as 1 line on the 1099-Q).   

Each of the 16 lines show the account numbers, gross distribution, earnings, basis, trustee to trustee transfer marked with X's, the distribution type and check if the recipient is not the designated beneficiary.

My issue is that Turbo Tax will only allow me to enter the information of 10 of the lines into Turbo Tax.  

If I understand your last response correctly, since there were no taxable distributions, we don't need to report it on our income tax return.

If my understanding is incorrect, then how can I enter the additional 6 lines of fund transfer information into Turbo Tax if Turbo Tax database only allows 10 lines of information?

I can't thank you enough for trying to understand my issue and responding to it.

[Hal_Al · Accepted solution]

Just don't enter the 1099-Q in TurboTax.  When the box 1 amount on form 1099-Q is fully covered by expenses, or ROLLED OVER to another education account, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records (the work sheet isn't going to tell you anything that will help with an IRS inquiry).  You'll need to show it went to another trustee.  

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." 

Otherwise, you will need to "double up". Add the numbers together so you make fewer entries.

[fetter187]

I completely understand and agree with the user who received a single 1099Q with 16 entries about 16 funds when she transferred the funds to another institution.  My wife and I did the same thing in 2020, and received a single form 1099Q with 14 entries (five grandchildren).  We were moving through the separate accounts, typing them in.  Then Turbo Tax decided to limit the number of entries to ten accounts.  Bad programming.  Please fix it.

I think I understand the point that since we have transferred these accounts fully to another institution and there is no tax consequence, we don't have to be too concerned.  We'll double up multiple accounts on the Turbo Tax entries.  But this is not good, and Turbo Tax should fix it.

[AmyC]

I understand your concern. As a tax preparer, you want every item accounted for and in its place. There are so many worksheets used in tax preparation and this is another of them. The actual forms go to the IRS, not the worksheets. The forms just have totals. There is no worry when it comes to your taxes. The IRS also received a copy of your form and is aware. Your information will not be recorded officially.

Thanks@Hal_Al, one of my heroes!

{Edited 4/1/20201 |3:06 pm PST ]

[Hal_Al]

@AmyC  said "The actual forms go to the IRS, not the worksheets. The forms just have the totals."

 When the box 1 amount on form 1099-Q is fully covered by expenses or by a complete rollover, TurboTax will enter nothing about the 1099-Q on the actual tax forms.  But, it will prepare a 1099-Q worksheet for your records, in case of an IRS inquiry.  

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." 

[christadmyers]

There is no form or format on your software for 1099-Q and 1098-T, how do I add this information?

[Hal_Al]

As previously stated, above, there is no IRS form that the numbers on the 1099-Q are entered on to.  You enter the 1099-Q and your expenses and TurboTax (TT) calculates the taxable amount.  It's complicated.  If you know none of the 1099-Q is taxable, just don't enter it. 

If you are claiming a tuition credit, TT will calculate that on form 8863.

Q. How do I add this information?

A. In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --Education Expenses  (1098-T).  Follow the interview

And/Or

 In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --ESA and 529 Qualified Tuition Programs (1099-Q).  Follow the interview