Why are the Adjusted Qualified Higher Education Expenses on my 1099-Q worksheet being reduced by $10,000 from the value on my 1098-T?

[Laura Y]

I have the same problem. How to go into the form to add $10k? (QTP Computation of Taxable Distribution line 2c)

[HopeS]

Form 1099-Q reports distributions and benefits from Coverdell education savings accounts and 529 plans. It's reported on the tax return of the person whose Social Security number is on the form.

1. Open or continue your return.
2. Select Federal Taxes and then Deductions & Credits.
3. Select I'll choose what I work on.
4. Under Education, select Start or Update next to ESA and 529 qualified tuition programs (Form 1099-Q)
5. Follow the screens to enter your info.

Click the link below for more information:

Where to enter a Form 1099Q

Also, review the Guide to IRS Form 1099Q in the link below:

Form 1099-Q

@Laura Y 

[Hal_Al]

@Laura Y 

Your question is not clear. What are you trying to accomplish?

There are three things you can do with your Qualified educational expenses (QEE):

1. Allocate then to scholarships (so that the scholarship remains tax free)
2. Use them to claim an education credit
3. Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable

TurboTax allocates QEE, in that order, until you tell it otherwise. TurboTax allocates QEE, in that order, but it doesn't do a very good job.  It's best if you have some idea of the outcome expected, when you make your entries. 

Provide the following info for more specific help:

• Are you the student or parent.
• Is the  student  the parent's dependent.
• Box 1 of the 1098-T
• box 5 of the 1098-T
• Any other scholarships not shown in box 5
• Does box 5 include any of the 529/ESA plan payments (it should not)
• Is any of the Scholarship restricted; i.e. it must be used for tuition
• Box 1 of the 1099-Q
• Box 2 of the 1099-Q
• Who’s name and SS# are on the 1099-Q, parent or student (who’s the “recipient”)?
• Room & board paid. If student lives off campus, what is school's R&B on campus charge. If he lives at home, the school’s R&B “allowance for cost of attendance” for student living with parents.
• Other qualified expenses not included in box 1 of the 1098-T, e.g. books & computers
• How much taxable income does the student have, from what sources
• Are you trying to claim the tuition credit (are you eligible)?
• Is the student an undergrad or grad student?
• Is the student a degree candidate attending school half time or more?