First, sorry if this has been touched on in other posts, but I did not see an answer that I feel answers my question. Unfortunately this topic is one I’m having trouble grasping the overall concepts, so I would appreciate any simplified explanations. (Please don’t just send a link to another article)
background: I have a 20yr old, filed as my dependent, in college. I pay tuition. I have a 529 and payments go directly to school. They also have grants and scholarships, and work study job, but they receive the income from that.
ok, I was doing my taxes and since the 1099-Q shows my kid as the beneficiary, TurboTax did not allow me to record anything on mine.
doing my kid’s, I put in the 1099-Q on their return and suddenly they owed a chunk of money. I then entered the 1098-T on theirs and did not change. (Scholarships and grants are not greater than tuitions, etc.) But then from what I interpreted from TT’s suggestion, I listed their room and board on a separate education expense. (those charges were part of the charges listed on the 1098-T). Then it came down to them owing $51. Overall w-2 income was less than $1200, but nothing was withheld except SS and Medicare.
does this sound right? I don’t see how the tuitions and payments from 529 affect their return, since I’m paying this and I put all the money into the 529. So, it’s a conceptual issue for me.
thank you in advance!
JS
