My Education 529 Plan Distribution
reported in 1099-Q exceeds the amount of my qualified education
expenses reported in 1098-T (tuition minus grants), plus room and
board plus book expenses. I also want to take the American
Opportunity Tax Credit (AOTC) which for me is $2500 this year 2018.
Reading from the internet, the AOTC should count for $4000 of my
tuition or 100% of first $2000 plus 25% of next $2000 tuition
dollars, the rest I should be able to apply my 529 distribution.
Where adding everything my distribution is still less than my
qualified expenses. I should be able to apply the rest of my tuition
toward my 529 distribution. Turbotax appears to have a bug, when I
dig down into the Tuition Summary Form I see the Turbotax is showing
$10000 not $4000 qualified expenses for the AOTC. Then when I look
at the 1099-Q Form it is showing the the my original qualified
expenses minus the $10000 which apparently is where it is taxing me.
I figured out how to disable the AOTC in Turbotax, figuring I would
now be able to apply my full 529 distribution tax free, but it is
still showing my expected qualified expenses minus the $10000?
Where does turbotax come up with $10000 deduction? Why is $10000
being deducted from qualified expenses regardless of the applied tax
credit? I read something about $10000 limit on 529 distributions
for kindergarten/high school, but that is supposedly not true for
college when there is no limits. I know I do not have to report my
1999-Q so long as my education expenses are greater than the
distribution but that leaves me open for an audit. I would rather
enter it all into turbo tax where it is showing I owe an extra few
hundred regardless whether I take the AOTC or not. Suggestions, did
I miss a check box somewhere?
