I do not recall how I go thru this last year and the software has not improved...it confusing.
Simple, common situation. Daughter in college.
Received 1098T. Box 1 Payments received for qualified expenses is $40K. Box 5 - Scholarships/grant is $22K. My daughter is listed on this form.
Received 1099Q . My daughter's name is in the recipients box. Nothing is checked in Box 8 - ...ie she IS the beneficiary. Box 1 Gross Amount is: 11K. Box 2 Earnings is: 4K. Box 3 Basis is: 7K.
So, in general, we (her parents) received a bill from the college of about $17k and paid it using her 529, a small federal loan and some cash. There was no excess dollars left over from the 529 withdrawal...it all went right to the school.
I think I understand I should enter the 1098T on MY tax return. Doing so seems to get me a $2500 credit. I think I get another $500 since she is a dependent.
My daughter is also filing a return for herself...she earned $4k on a summer job and most likely is due her $300 in fed taxes back....it indicates so until we enter the 1099Q on HER return.
So, where does the 1099Q go? On my return, her return or no return.
If I enter it on her return (and many posts say it must go on the recipients return) then suddenly it says she owes $450 in taxes instead of getting back $300. I figure that is because the 1098T is no where to be found to offset things,
If I enter it on MY return (I already entered the 1098T) it pops up a message that says something like $2K is taxable...BUT the amount it has calculated to that point for MY refund does not ever change. So who is responsible...what is TT trying to tell me.
If I do not report it all...well that does not seem right.
I am trying to dig out my return from last year to see how I handled it but to be honest I was confused then as I am now. I want to get this right..the last thing I need is an audit and owing back taxes when she graduates...and is looking to me to help with her masters degree since by then the 529 will be depleted!
