This is not an acceptable response by TT. TT calculates the taxable portion of 529 distributions, so if a 1099-Q is entered, there has to be a way to enter the qualified expenses so that the taxable portion is correct. The worksheets are saved for the customer's records, and even though the taxpayer should save receipts in case of an audit, this is no different from the worksheets which are saved for various itemized deductions on Schedule A, or interest and dividends on Schedule B. If the interview process asks for all 1099-INT and 1099-DIV, etc. then it asks for 1099-Q, they should be entered, and any deductible expenses that offset that 1099 income should also have a way to be entered. We buy TT each year so that the tax preparation process is simplified to just an interview process provided we have all the necessary forms (W-2s and 1099s for income, 1098-Ts, state estimated tax receipts, property tax receipts, or our own records for non-cash charitable contributions, etc. for itemized deductions) and when we're asked to enter some but not others, it leads to oversights, incorrect tax calculations, possible audits, and ultimately loss of confidence in TT's product. Might as well use the IRS's Fillable Forms at that point. Or is TurboTax going to lobby to kill that too?
