Q.  I need to know how and where to enter this in TT in the correct sequence so that I get advantage of any education credits and so I'm not taxed on the distribution.

A. In your example, you have exactly the same amount of expenses (9687+5793 = 15480) as your 1099-Q distribution.  You can't have both a tuition credit and a totally tax free 529 plan distribution. You can not double dip (use the same expenses for both).

It's best to pay a little tax on the 1099-Q, so that you can claim the credit.

In TurboTax (TT), enter the 1099-Q,  at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --ESA and 529 Qualified Tuition Programs (1099-Q

Later, enter the 1098-T, In TurboTax (TT),  at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --Education Expenses

Follow the interview. When  you reach a screen titled "Your Education Expenses Summary".  Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use (usually $4000) or change it.