Q. How do we get Intuit to fix it?
A. You don't. I have their attention and I've been unable to do it. There just too many scenarios in education.
There are three things you can do with your Qualified educational expenses (QEE):
- Allocate then to scholarships (so that the scholarship remains tax free)
- Use them to claim an education credit
- Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable
TurboTax allocates QEE, in that order, until you tell it otherwise. TurboTax allocates QEE, in that order, but it doesn't do a very good job. It's best if you have some idea of the outcome expected, when you make your entries.
I called entering the scholarship, at room & board, a "workaround". Technically it's not. That's just how you tell TT how much of the scholarship was allocated to non qualified expenses, making it taxable.
