My daughter is in college, and I claim her as a dependent. Thus as I worked on my own taxes, I entered the 1098-T information on my side. Since she did a summer job and has a W2 from last year, we are now working on her tax return form.
- Per info mentioned here, since the 1099-Q stated her social security number as the recipient, I need to enter that form in her return instead of mine, correct?
- However, once I entered that form, she now has a very high taxes dued - I assume it is because of the Earnings (Box 2) from the 1099-Q. But shouldn't that gain be tax free since the whole point of 529 is to be used to pay for education expense? Is there somewhere else I am supposed to enter the expenses since every dollar spent from the 529 is for her education.
- I tried entering her 1098-T in her tax form and that brought the tax due number down quite a bit (although not to zero). From reading answers here I believe I cannot do that since I entered the 1098-T info on my own tax form already?
- Should I remove the 1098-T from my side and enter everything on her side instead?
Thank you very for your help in advance. Super confused on this one.
