study abroad fees

[permda]

Both my daughters studied abroad last summer.  There was a tuition payment for their classes and a mandatory fee paid to their University.  I used money from the 529 accounts to pay these fees. They are qualified uses of 529 money but the fees are not reported on the 1098-T from their schools. TT does not give a place to enter these fees so it is acting like I had excessive 529 withdraws and wants me to pay taxes on the excess.  How do I enter these fees?  One of your "experts" in the forum said just put it as tuition not reported on 1098T but that doesn't seem right.  Study abroad is very common these days and I am not sure why TT doesn't address this.  How am I supposed to enter this information?

[MarilynG1]

If all of your 529 distribution was used for Qualified Education Expenses, you don't need to enter the 1099-Q in your return.

Click this link for more detailed info on 1099-Q.

You can enter expenses you paid 'out of pocket' without a 1098-T; however, your foreign school would have to be on the Federal School Approved List. 

Click this link for more info on Tuition Expenses at Foreign Schools. 

[permda]

The abroad program is simply another campus of GA Tech so it is an IRS approved school.  I just can't find a way to include the program fee in TT.  Not entering the 1099-Q doesn't seem right since it specifically asks if I received one (which I did and I am sure the IRS did too).  I really just need to know where to enter this fee so that it doesn't say I owe tax on this 529 distribution?

I really like TT but this is a real problem for many people I have talked to.  Study abroad is very common place these days. I feel like TT has dropped the ball on not including this in the interview questions.

[NCperson]

to add to @MarilynG1's response

1) as long as you are getting the maximum AOTC credit, there is no value adding more expense to Box 1 of form 1098T

2) if you read the instructions of Form 1099Q closely, it states:

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.

so as long as the 1099Q box 1 is exceeded by 1099T Box 1 less 1099T Box 5 less $4000 (if you are taking AOTC) plus your other expenses (fees, room and board, books, computer costs), the 1099Q doesn't have to be sumbitted as you've determined there is no tax liability. 

not entering the 1099Q may not seem right, but it is not sent to the IRS in any event and the instructions tell you it doesn't have to be reported!!!!

it's complicated

[KrisD15]

You can ask the school to issue a 1098-T, that way the cost for the study abroad can be entered.

OR

If you know that you are allocating the distribution to the study abroad program, don't enter the 1099-Q and don't enter the corresponding study abroad program expense. 

According to the IRS:

“Generally, distributions are tax free if they aren't more than the beneficiary's adjusted qualified education expenses for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return.”

IRS PUB 970 Page 52

@permda

[permda]

That is just it.  The 1099-Q exceeds the 1098T because of the study abroad fees that were paid by the 529 plan.  In addition, TT states that my "net qualified education expense is zero" and therefore I am not eligible for the AOC. My expense is not zero.  On the 1098T, box 1 is $2500 more than box 5.  I feel like I entered everything correctly and TT is miscalculating it.  Why does it say "net zero" when all the totals show there were net expenses?

[permda]

To clarify, the 1099Q box 1 exceeds box 1 of 1098T but total expenses with Room and board and fees is much greater than 1099Q box 1.

[KrisD15]

In your case, either enter the 1099-Q AND the study abroad fee,

OR

Don't enter the 1099-Q and don't enter the study abroad fee that it paid

If you are going to enter the 1099-Q, enter the study abroad fee as a book expense (if tuition) or as room and board (if it includes travel and lodging) 

[NCperson]

if you can please the following, I can walk you through the actual math and put this to bed:

1098T: Box 1:

1098T: Box 5

1099Q: Box 1

1099Q: Box 2

Expenses NOT in 1098T Box 1 (think Room and Board, Books, Computer expenses)

on the 1099Q: whose social security number is on the form? yours or your students?

are you eligible for AOTC? 

that should do it!