We used a Coverdell account to pay for qualified expenses (tuition, room & board, etc.) for a study abroad program. The sponsoring school (Franklin University) has dual accreditation (both the US and Switzerland) for college credits but not for student aid. But the monies were paid to the third-party study abroad program provider, Forum-Nexus.
There is no form 1098-T from either of them and I think they’re not required to issue one. But I want to make sure the expenses are entered properly so there is no issue with the Coverdell disbursement. How do I go about doing this in TurboTax Premier?
In the “Where did you go to school?” screen, would I enter the program provider or the university? If I enter the university, it later asks for the “Amount paid to Franklin University” and that was $0 directly. But I do have a breakdown of tuition and room & board from Forum-Nexus.
We’ve used the four years of American Opportunity Credit. And I don’t know if the Lifetime Learning Credit would kick in because the tuition was covered by scholarships and Pell grant.
Any assistance would be helpful!
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Yes, if you will not qualify for the education credit, the 1099-Q should not be entered and none of the student information needs to be filled in since none of it will go to the IRS.
Because Pell grants and scholarships covered the tuition, you would not qualify for an education credit at first glance. In order to qualify for the education credit, the money must be paid to a qualified organization. See Eligible Educational Institution - Internal Revenue Service. If qualified, the next step is to determine how the monies were spent. You may be able to make some taxable to the student to leave you some payment for education credit, which is always better. Please see another post of mine here.
IRS Pub 970 states: Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return.
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. 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. 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 also cannot count expenses that were paid by tax free scholarships. You cannot double dip!
References:
Sorry. I'm not clear on where that information integrates with the forms. On the “Where did you go to school?” page, are you suggesting that I not enter the study abroad at all?
Yes, if you will not qualify for the education credit, the 1099-Q should not be entered and none of the student information needs to be filled in since none of it will go to the IRS.
Because Pell grants and scholarships covered the tuition, you would not qualify for an education credit at first glance. In order to qualify for the education credit, the money must be paid to a qualified organization. See Eligible Educational Institution - Internal Revenue Service. If qualified, the next step is to determine how the monies were spent. You may be able to make some taxable to the student to leave you some payment for education credit, which is always better. Please see another post of mine here.
IRS Pub 970 states: Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return.
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