WOW...you cleared up a bunch of stuff for me. It sounds like I just enter the 1098T on MY return and file the 1099Q away.
However...I never understood HOW I got the $2500 awarded to begin with...if you need not enter the 1099Q I assume it just looks at the difference between the total expenses on the 1098T and the scholarships/grants...but I suspect its not that simple!!!
It sounds like to get the $2500 you must have 'expenses' greater then '4K' if I understood you. I am getting worried again. I guess my question is what are my expenses? My 1098T shows $40K tuition/expenses. It shows 22K scholarships/grants. That leaves what I would consider 18K balance expenses for the year and that's a lot more than $4K! . But I am guessing that not what the gov considers expenses...
That 18K balance was paid by:
1099Q:
Box 1 -$11K payment to the college
Box 2 - 4K of the 11K was 'earnings' which I assume to be interest earned (tax free) over time
Box 3 - 7K of the 11K was 'basis' which I assume to mean money my wife and I put into the 529
Then we have:
6K in Federal Loans Accepted by my ''daughter
And finally around:
1K Cash for books and stuff we paid out of our savings account
So the big question is: based on the above, should I be getting the $2500????? TT seems to think so whether I enter the 1099Q or not.
SO, what exactly counts towards that 4K magic number you mentioned? The 1K from my savings? The $6K loan my daughter accepted? The entire 11K payment made from the 529 to the college? Only the $7K Basis from the 529 payment?
I do not know how TT determines all this or if its something I must determine for myself.
So, Hal_AL….you cleared one thing up for me and I appreciate that more than you can imagine...can I go to the well again and ask you or anyone else for help on the second matter?
