Thank you in advance for your assistance.
I'm thoroughly stumped with the 1099 Q and 1098 T. I am receiving the AOTC credit of $2500 but when I query the 1099Q and enter the info, TT says that a portion of my daughters 529 earnings are taxable income to her. I will provide actual numbers so an expert can hopefully help me:
Total tuition, room and board, books and supplies that we paid in 2024 were: $42,219
1098T
Box 1 - $59,152 (this does not include room and board and supplies, it also include scholarships & aid)
Box 5 - $35,315
Box 7 - checked
1099Q
Box 1 - $32,628
Box 2 - $4,467
Ideally, I'd like to ignore the 1099Q since we paid almost $9600 over the amount we had the 529 reimburse. This would cover the $4000 which goes to the AOTC. I think the scholarships are what's confusing me...are scholarships and university aid taxable? I don't think we are "double dipping". Depending on this years outcome, we may need to file a 2023 return for my daughter if it turns out she had some of the 529 earnings be taxable for last year.
Happy tax season!
