You have more than enough expenses for the 529 distribution to be tax free and you claim the maximum tuition credit.
Don't enter the 1099-Q, in TurboTax (on either your tax return or your daughter's). The 1099-Q is just an informational document. The numbers are not required to be reported on your tax return. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms.
When you enter the 1098-T, in TurboTax, enter $16,451* in box 1. Do not enter any other amounts.
*$27,955 + 2644 = $30,599 Total qualified expenses. $30,599 -13,948 (paid by 529 distribution) - $200 (scholarship) = $16,451. $16,451 is your Adjusted qualified educational expenses.
Grad students are not eligible for the more generous American Opportunity Credit. You are eligible for the Lifetime learning Credit (LLC). The LLC is 20% of tuition paid, up to $10,000. The LLC is non-refundable. It can only reduce your tax liability.
The 1098-T is also only an informational document. The numbers on it are not required to be entered onto your tax return. If you claim the tuition credit, you do need to report that you got one. TT will handle that.
You claim the tuition credit, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid.
Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.
Note books and computers are not qualified expenses for the LLC (they are for the AOC). But they are qualified expenses for the 529 distribution.
If you want to withdraw more from your 529 plan next year, find out the school's room and board "allowance for attendance" for students living at home. You can withdraw that much from your 529 plan to cover her food costs.
