Yes, this is helpful but let's be clear. People like myself use TurboTax because it walks us through these scenarios, helps up fill out the worksheets and helps determine what is or is not part of our income.
The 1099-Q was sent to my daughter who is the beneficiary of the the 529 and is the recipient of that rollover.
When we walk through the step-by-step of TurboTax, it asks--Did you receive a 1099-Q? We answer YES.
Then we fill information and answer the questions and the worksheet should through the responses we provide based on the QTP-to-Roth box and other responses, determine that the income should not be included. We fill this information out in TurboTax so we ensure we do not miss anything and expect the tool to do the job we purchased it for to guide us to indicate that it is not necessary to list this as income.
So while your are quoting proper information about taxes, and she could just avoid answering YES to the 1099-Q question, we would actually expect that TurboTax would allow her to answer this information so that I have a secondary record that shows that she answered and provided this information, that the tax check before filing will validate that there are no errors and she can submit her taxes knowing she has put this information into the worksheet, TurboTax validated that it was not considered income, and the information would be there if an audit were ever done (because then it would be there for the audit defense).
What I am asking for is that Intuit get this addressed ASAP. It is a tool issue that needs to be resolved and should be resolved so that taxpayers using their tool do not have to kludge the information to get their taxes filed.
