Hal_Al
Level 15

Education

The 1098-T does not  usually include room and board. It's had to believe a college would make that mistake. 

Do not try to enter the taxable portion of the 529 distribution in the income section.  It's all done in the education (deductions/ credits) section.

The car is not a qualified expense, do not enter the purchase.

I'll assume the 1099-Q is in your name & SS# (you are the "recipient"), not your daughter.

 

Enter the 1099-Q first. Enter the 1098-T, then follow the interview to enter books and room and board. Go through the entire education interview until 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 (usually $4000) you want to use or change it.

 

Or provide the following info and I'll tell you exactly how to do it.

Box 1 of the 1098-T

Box 5 of the 1098-T

Box 1 of the 1099-Q

Box 2 of the 1099-Q

How much you/she paid for room & board

How much you/she paid for books, computers and other course materials and tuition/fees not shown on the 1098-T.

How much reportable income does you daughter have and does sh plan to file a return

 

Example:
  $10,000 in educational expenses(including room & board)

   -$3000 paid by tax free scholarship***

   -$4000 used to claim the American Opportunity credit

 =$3000 Can be used against the 1099-Q 

 

Box 1 of the 1099-Q is $5000

Box 2 is $600

3000/5000=60% of the earnings are tax free

60%x600= $360

You have $240 of taxable income (600-360)

 

 ***An alternative is have the student report some of her scholarship as taxable income, to free up some expenses for the 1099-Q and/or tuition credit. Scholarship will (most likely) be taxed at a lower rate on her return than the 529 will be taxed on your return

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