The 529 should not be reported for qualified expenses so it will not go on your return. The kids are filing their own returns and can claim LLC for any expenses not covered. Remember, the 529 can count for room and board, even the one living at home. This frees up more money for the LLC.
IRS Publication 970, Tax Benefits for Education states:
If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.
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