@Hal_Al you are a TT rock star. I see you've helped many people with these college expense questions. Why is it so incredibly complicated? Ugh!! I think our family is in a somewhat similar situation as the above. But I'm so confused. Here goes.
Our dependent son started university in Fall 2021. The 1098-T shows $11,246 received by the university in box 1 for qualified tuition and related expenses (not room and board) for BOTH Fall and Spring semesters. It also shows the $7,395 (box 5) he received in Fall scholarships ($6,154 of which was applied to Fall "tuition and related expenses," leaving $1,241 to be applied toward Fall room and board). Because our married-filing-jointly income exceeds $180K, TT says we cannot submit the 1098-T. QUESTION: Is that okay? We're not seeking the education tax credit, but doesn't TT need to know those amounts to correctly calculate our tax burden/credits? And does the $1,241 mentioned above count as income for our son? (He didn't make enough in 2021 to file.)
Form 1099-Q shows the $15,713 distributed to us from our 529 plan. $8,318 of that was for qualified education expenses (e.g., room and board), and $7,395 of it was to reimburse ourselves for his $7,395 scholarship (noted in box 5 of 1098-T). The total of $15,713 appears as income initially, but then also appears as a deduction. However, the earnings on that $7,395 scholarship reimbursement 529 distribution was $3,486. I know we need to pay taxes on those earnings related to the scholarship-equivalent distribution. QUESTION: How will TT know about that? Where do we enter the $3,486 earnings portion of that distribution in TT?
I just want to make sure we're entering this info correctly. I've even deleted the forms and re-started them, but I still get the feeling something is not right. Thanks in advance for your assistance. If we're still stumped, my wife will want to hire a CPA which we've happily and easily avoided for 12+ years, thanks to TT.
