I do not understand how to enter this.
I have one 1099-Q issued to me (I took non qualified withdrawal due to her Scholarship).
Box 1 $39098 Gross
Box 2 13186 Earnings
Box 3 25911 Basic
Box 6 is ticked.
And another 1099-q in her name
Box 1 33680
Box 2 11551
Box3 22128
Box 6 is not ticked.
She attended 2 colleges.
First 1098-T shows $3110 in Box 1
Second shows:
Box 1 $58425
Box 5 Scholar Ship $37000
The actual tuition paid is $70690 (College scholarship paid $70690).
In addition she had $8100 in Room and Board since she lives off campus.
On her Tax Return for 1098-T I entered
Box 1 58425 (and then entered actual tuition paid 70690) and the Box 5 $37000 scholarship.
I did NOT enter second college or Room and Board.
For her this matched - the money paid vs the 1099-Q in her name,
Now for me - I want Turbotax to acknowledge I am allowed to take out $37000 without a penalty due to the scholarship rule.
For expenses on my Return I would enter
$3110 for her 2nd College
$8100 for Room and Board.
But how do I enter the $37000 scholar ship from the first school on the expense side? (We are NOT allowed to take Education deductions or revenue due to income level).
On the 1098-T panel do I enter
Box 1 $58425
Then Enter the tuition paid $37000
Box 5 $37000
??
When I do that on the Student Info Worksheet it ends up calculating the Earnings Taxable to recipient as $9117 and there is no Tax Penalty (because it knows about the $37000 Scholarship).
That makes sense to me ...
I took out $39098 in my name and I spent $12067 on education expenses ($3110+Room and Board and Computer Expense).
The Excess distribution is $27031
Based on the 1099-Q Earnings vs Basis ratio that ends up being $9117 as taxable income to me....
BUT is it correct to file it like that ? I am not sure how much of this the IRS gets to see like the 1099-T and 1098-Q numbers reported.
I did it to make Turbotax calculate it ....
