I had tacked this on to another post of mine but since it didn't get answered I'm posting it again separately.
Background DS is a 5th year student who lives at home and is NOT a dependent this year. This is the first year we used funds from the 529 so not sure we are handling all the aspects correctly.
College billed (and DS paid) 7632.47. Of that 6585.63 was labeled as tuition and 1063.84 was labeled as fees. Not entirely sure what fees goes to as they don't break it down any further and the fees are required to attend.
Plus he had 27.42 for a required book that he bought elsewhere. No room and board (he lives at home), no other expenses.
DS's name and SS are on the 1099 q
Box 1 $7629.83 (I forgot to include the book and I rounded down the requested amount a couple of dollars one semester to an even number).
Box 2 1827.70
His 1098T from the college says $7144.78 in Box 1. All other boxes are blank (he doesn't receive financial aid) except the one checked at least half time student.
Questions
The 1098 T is less than what he paid the college. I know I can go to the "hidden" box and enter the amount we actually paid but "should" he. Are some of the fees he had to pay considered unqualified expenses? Is that why the college lists a lower amount? Surely they know better than I what those fees are used for and if they are a qualified expense or not but at the same time we don't have any choice about paying them.
1099 Q amount was based on what he paid (and we thought were all qualified expenses since it was required to be paid to school). However it is higher than what the school lists. I know I can skip entering it "IF" he has matching qualifying expenses but does he? Currently if I enter both forms exactly as given to him, he has an overdraw on the 1099 and gets hit with the penalty plus all the amount of Box 2 is showing as income. Leaving it off solves both issues but because of question above I'm not sure if I'm legally entitled to not report the 1099 Q
Last question, We have claimed the 4 years of AOC when he was a dependent. Even though he is now independent, I know he is not eligible for the AOC however, is he eligible for the lifetime learning credit? Or is paying with 529 funds and claiming the credit what is considered double dipping? My brain is getting overloaded with all the technicalities and I want to make sure I'm doing it correctly.
