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Retirement tax questions
Here's how to enter your 1099-Q in TurboTax:
- Open or continue your return.
- Select Federal and then Deductions & Credits.
- Scroll down to the Education section under All tax breaks.
- Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
- Follow the screens to enter your info.
Here's how to enter your 1098-T:
- Open or continue your return
- Select Search and search for 1098t
- Select the Jump to link in the search results
- On the Do you want to enter your higher education expenses? screen, answer Yes
- Answer Yes to Did you get a 1098-T for the year? and Continue
- On the next screen, you can choose how you'd like to add your 1098-T. You can upload a digital copy from your computer or type it in yourself. Select which option you'd like and Continue
- If you need to enter a 1098-T for someone else, continue through the screens until you get to the Your Education Expenses Summary screen, then select Add A Student
Some important tips about entering this form:
- Enter your 1098-T exactly as is, even if the amounts are wrong (this is common). You'll get a chance to correct this info and enter additional expenses later on
- Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors
- Parents: If the student listed on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition
- Students: If you're not being claimed as a dependent, enter the 1098-T on your return regardless of who paid the tuition, unless it was your employer. In that case, just keep the 1098-T with your tax records
- TurboTax Free Edition doesn't support Form 1098-T
It appears you might have withdrawn too much from your 529 plan. While 529 withdrawals are tax-free to the extent your child (or other account beneficiary) incurs qualified education expenses (QHEE), withdrawing more than the QHEE means the excess is a non-qualified distribution. You or your beneficiary — you get to choose who receives the money — will have to report taxable income and pay a 10% federal penalty tax on the earnings portion of the non-qualified distribution. The principal portion of your 529 withdrawal is not subject to tax or penalty.
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March 16, 2022
9:32 AM