Thanks Hal_AI. I need to provide updated assumptions below which simplify my situation.
- Student started community college in fall 2022
- No scholarships to consider / No room and board / No Coverdall / No AOC / Just tuition and book expense
- Turbo tax indicates I cannot claim tuition or other fees but to enter education expenses to avoid paying tax on your qualified tuition program (QTP).
- I updated expenses (books) in Turbo Tax to reflect the actual amount paid out of pocket in 2022 only.
- Entered information from 1098-T (which correctly reflects the fall and sprint semester tuition amount paid out of pocket in 2022)
- Turbo Tax indicates "can't claim an educational tax break." The reason is valid so am fine with it.
- Entered 1099-Q information as shown on form (which correctly reflects the 1 semester distribution in 2022, this amount is less than 1098-T due to January 2023 distribution).
Based on the updated set of assumptions, I'm not sure of my options to complete my 2022 tax return. I appreciate your knowledge as this has been a great help. I may just opt for the Live Tax Advice to get this sorted.
A separate question is can you count the 529 distribution in January against the 2022 payment for 2023 tuition. The answer is the same as for your original question about mismatched book expenses; technically the payment and distribution must be in the same year. YOU have to make the decision on what to do.
