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I have the same problem. My CHET withdraws are 100% for qualified expenses. According to CHET, qualified expenses are tuition, room and board, books. When I put in the info from 1098-T which include room and board expenses, it is saying I have taxable income which is not the case. My CHET distribution were for qualified expenses. This program is frustrating; does not make sense. Probably try another software. Frustrating.
@Maris2 - " When I put in the info from 1098-T which include room and board expenses"
The 1098-T does not include room and board. You have to enter room and board expenses separately.
To get the screen to enter Room & Board, answer yes when asked if you have book expenses (book expenses are also entered separately from the 1098-T, unless include in the course fees)
REMOVE your CHET distribution. Do not enter it into the program at all.
You do not report Form 1099Q unless you have a taxable distribution.
Refer to the "Instructions to Recipient" on the form itself: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return." (emphasis added)
Your response suggests that is exactly the situation I am in. Can you tell me what step you followed in TT to make it account for expenses correctly? I had entered 1098-T and then entered education expenses and the only common thing was it as all directed to one child, same as the 1099-Q. So dont know what I need to do. Delete all entries and then what next? Thanks.
My question is if My son receives a 1099q with earnings but all of the distributions went directly to the qualified distribution, must he file a tax return and if so can it be a 1040ez? He has no other income.
Q. My question is if My son is the RECIPIENT of a 1099-Q, with earnings, but all of the distributions went directly to qualified EXPENSES, must he file a tax return if and if he has no other income.
A. No. See above replies/commemts for why.
Hi in doing this for my 2020 return. I now see that I overpaid for 2019. How do I amend my 2019 tax return using turbo tax please? Do I also need to amend my MD tax return too?
thanks
Hi in doing this for my 2020 return. I now see that I overpaid for 2019. How do I amend my 2019 tax return using turbo tax please? Do I also need to amend my MD tax return too?
thanks
It is May 2021, I am using Turbo Tax Premier 2020, and I am having this same problem: My AGI is too high and TurboTax is applying 1099-Q distributions as income when there were ENTIRELY used for qualified expenses. According to IRS Pub 970 pages 59-60, there is no such AGI limit. I have tried to use the steps people described in June 2019, but I cannot find the "Amount Used to Calculate Education Deduction or Credit" anywhere in my version. The cost to me in reduced refund is about $6000!!!! haven't even looked at my 2019 returns yet (although I recall struggling with similar problems and thought I had figured it out). Someone from Intuit -- please help - THIS IS INSANE!!!
@spartan1961 said "distributions as income when there were "ENTIRELY used for qualified expenses"
The simple solution is just don't enter the 1099-Q*. If the distribution, from the qualified tuition plan, was totally spent on qualified educational expenses, you do not need to report the 1099-Q as income. So, just don't enter the 1099-Q into TurboTax (TT). When TT determines that none of it is taxable, there is no entry made anywhere on the IRS tax forms.
*This assumes the box 1 amount (not just the box 2 amount) of the 1099-Q was ENTIRELY used for qualified expenses.
Thank you Hal_Al. What is EXTREMELY frustrating to me is that I spent half a day trying to figure this out. Why can't Turbo Tax simply say that? The IRS guidelines are very clear and simple about this. It is a big deal. (It makes a $7K difference in my refund when I consider both federal and state taxes). I'm getting more and more frustrated with Turbo Tax -- and I've been using it for about 30 years. What is especially aggravating is how poor a job it does with my state taxes -- I have to create separate spreadsheets on the side to account for state-specific items, DESPITE them being importable, and worse: despite the information being directly available from my prior year state return! (WTF?!?)
I assume I'm one of those taxpayers who is now being audited by my state because of this 529 plan issue highlighted above. All 529 money was used for tuition for my daughter, yet I'm apparently going to lose my refund but also am being told to pay yet another $800 on top of that, on account of a 529 plan distribution used for qualified expenses. Do I re-file my return and try to correct this issue, as it doesn't sound like TT has a handle on it getting done correctly? I've not been audited before and now getting a state audit for 2015 tax year. I don't remember what I had for breakfast...
I suggest you start a new question and clarify your situation. You've tagged on to a thread that is 7 pages long.
It's not clear what your issue is. For a 529 distribution, it is not usually necessary to "re-file" (amend) your tax return. You just provide proof that you spend the money on qualified educational expenses.
I was "audited" for a 529 distribution. I just sent em a copy of the school's billing statements. That took care of it
At least two other TT users have reported receiving a CP2000 letter, from the IRS, on 529 distributions. They replied that their child was in college and the distributions were for qualified expenses, which they listed, but they did not provide receipts.. They later received a notices saying they were in the clear.
HELP, TT Premier is saying the Box(2) Earnings on the 1099-Q are TAXABLE. WHY??? I thought all with drawls from 529 were tax free? I'm confused.
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