Turbo Tax has created a major mistake with this filing because Turbo Tax adds 529 distribution as income to the filers and that increases the tax that filers have to pay.
When you have a 1099-Q it is *IMPERATIVE* that you work through the Education section the way it is designed and intended to be used. If you do not, then chances are extremely high that you will *NOT* be asked for room and board expenses. Therefore the 1099-Q funds that were "in fact" used for room and board expenses will *NOT* be deducted from taxable income and you *WILL* pay taxes on that 1099-Q distribution.
Now if the 1099-Q is the same or less than the qualified education expenses of tuition, books, and lab fees, then you don't need to enter that 1099-Q at all. But keep it along with a written explanation of why you did not enter it, just in case the IRS questions this 2-3 years down the road.
Generally, if there is an audit at all, then paper audits by mail occur anywhere from 24 to 36 months after a filed tax return has been completely processed by the IRS. So keep notes of your decisions and why you made them so you can explain to the IRS should the need arise.
