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ilumindhs
New Member

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

 
6 Replies
cameaf
Level 5

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

Because room and board is not usually a deductible expense, there is a workaround to entering the information if you have a Coverdell ESA or Section 529 plan taxable distribution.

  • First, enter the form 1099-Q into TurboTax in the 529 distribution screen. 
    • This can be found by searching for "529" in the search box. 
    • Click the jump to 529 link. 
  • Second, enter the room and board expense while entering the rest of the educational related expenses in the education expenses screens. 
    • This can be found by searching for "1098-T" in the search box.
    • Answer the applicable questions. 
    • Once you get to the Did _____ Pay for Books or Materials to Attend School? screen, click yes
    • Enter the room and board expenses in the box next to Books and materials required to be purchased from the school (as shown in the attached screenshot)

https://ttlc.intuit.com/replies/3302307

Tiger17
New Member

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

This answer is inaccurate.  A 529 distribution is not taxable if it is used for room and board.  I corrected a similarly erroneous TurboTax answer three years ago and, although I posted a detailed work around the TurboTax problem, my correction has unfortunately been deleted by TurboTax.
Tiger17
New Member

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

From <a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/529-plans-questions-and-answers:">https://www.irs.gov/newsroom/529-plan...>

Q. What is the main advantage of a typical 529 plan?

A. Earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board at an eligible education institution and tuition at elementary or secondary schools. Contributions to a 529 plan, however, are not deductible.
maglib
Level 10

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

To the extent a 1099Q is used for qualified education expenses which for 529s does include room & board, you don't even need to report the 1099Q at all.  There is no workaround. TT handles this scenario 100%. You just must work the interview correctly in order. After entering the 1099Q, during the education interview, you enter the education expenses and it will ask you about room & board costs.  Again, if the 1099Q isn't taxable income, you don't need to report it at all, just don't claim the education expenses paid with the 1099Q so you won't double dip.  Neither the 1098-T nor the 1099Q are required to be reported unless the create taxable income or you want to qualify for deducting education expense.
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dhmjdds
New Member

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

If you are trying to balance the expenses (tuition, room and board, books, etc.) you paid with the money you took out of a 529 plan, I recommend that you enter the information directly on the Student Info Worksheet (found in Forms in My Return). I found that entering information in the various more automated worksheets did not work properly. 

Be sure to check all of the appropriate boxes at the top of the Student Info Worksheet; if you don't, the amounts won't carry properly to the rest of the form.

When you get to Part VI (Education Expenses), you may find that there is a seemingly random amount on line 17 "used for credit or deduction." If you are only using 529 money and not trying to also take one of the education credits (Hope credit etc.), you will need to manually delete this number and enter zero on the line.

maglib
Level 10

Where do I show my son's room and board expenses for college so that his 529 distribution is deductible?

TT revamped the education interview... I reccomend going through it first as many miss things in forms mode.  Go through the interview first, only go to forms mode if needed.  If you enter something in forms mode erroneously or not in proper order, it could cause a lot more issues.
**I don't work for TT. Just trying to help. All the best.
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