Before I started the chat with you, I started my daughter's tax return in Turbo Tax and I included the 1099-Q info and the 1098-T info but than I realized I needed some advice. As I stated before, the distribution amount in Box 1 is 2031 on the 1099-Q and the earnings amount in Box 2 is 1249. Her qualified expenses are 9613 and her scholarships are 6400 leaving her an adjusted qualified expense amount of 3213. You said when the box 1 amount on form 1099-Q is fully covered by expenses (which is the case in this situation), TurboTax will enter nothing about the 1099-Q on the actual tax forms. However, when I started the return earlier, I entered the 1098-T and 1099-Q info on her return and Turbo Tax did enter the earnings on the tax return and it is saying my daughter owes $14.00. I don't understand why she would owe anything when the scholarships are not taxable and Box 1 on the 1099-Q was fully covered by expenses. Can you explain this?
