I spoke to a finance/tax person and they told me that as long as my wife and I 1) do not exceed the $16k each for 2022, and 2) have the money sent directly to his school, we would not even have to declare these. Which we did. We did not have any withholding done. But now I have received two 1099-R forms from Schwab marked as Simple IRA and when I try to mark them as GIFT, TT says that is not allowed. So do I just not include them on my taxes? Do we owe taxes on this money? It seems I can file a form 709 to avoid the taxes (but it lowers my lifetime exclusion) - am I correct here?
And a follow-up, this year his tuition has increased but I also learned that for 2023 the cap is now $17/per person, which is great but I also need to pay for his medical insurance which is another $4k. Now it seems I can pay both but I definitely need to file a form 709 - is my understanding correct?
Thanks in advance.
