Q. I have seen on this forum that if I know that the expenses are greater than the distribution then just delete these forms and not report it. Can I do that?
A. Yes
Q. Doesn't the 1099-Q go to the IRS?
A. Yes, the plan administrator sends a copy to the IRS, as well as you. But TurboTax does not. If the 1099-Q amount is fully covered by expenses and If TurboTax does it properly, it will enter nothing about the 1099-Q on the actual tax forms.
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
