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Get your taxes done using TurboTax
I don't know if this will help anyone else but I did find a method to the TurboTax madness.... Or perhaps government madness.. I'm not sure I fully understand it but I found a thing called the student information worksheet which describes the math on how it appears TurboTax is allotting some of my 529 payments to be taxable in order to get the benefit of the $2,500 rebate.
Maybe this makes sense to you accountants out there but here's what it looks like it's doing.
I start with 51k in tuition and 23k in scholarships that leaves 28K in expenses. For some reason it issues a 10K credit. I think somebody alluded to this in an earlier post. So now I'm at 18K inexpenses. I'm not sure what happened here... Nor do I understand it but nevertheless....
It next grabs the 27k gross distribution from the Q form and subtracts the now 18K in expenses... that gives us 9k that it's sort of looks like is being portrayed as an excess or an over distribution.
It next takes the 18K in expenses divides it by the 27k gross distribution yielding 66.6% which it now multiplies the basis of 7K by as found in box 2 on the 1099q... That yields $4, 666. Then, the 7K basis minus the 4666 leaves 2333 which it says is taxable income to the recipient which I'm going to assume is myself even though it's in my daughter's name because I'm entering the Q and the T on my own return.
I'm not sure I understand what's going on but it seems to me TurboTax is saying if I pay tax on the $2,333.. which might be $200 or so... it'll give me the $2,500 credit.
If this makes sense to any of you people out there please let me know ... I will certainly sleep better...and also God bless you for understanding this!!! Thanks all.