GeorgeM777
Expert Alumni

Retirement tax questions

Here's how to enter your 1099-Q in TurboTax:

  1. Open or continue your return.
  2. Select Federal and then Deductions & Credits.
  3. Scroll down to the Education section under All tax breaks.
  4. Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
  5. Follow the screens to enter your info.

Here's how to enter your 1098-T:

  1. Open or continue your return
  2. Select Search and search for 1098t 
  3. Select the Jump to link in the search results
  4. On the Do you want to enter your higher education expenses? screen, answer Yes
  5. Answer Yes to Did you get a 1098-T for the year? and Continue
  6. 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
  7. 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It appears you might have withdrawn too much from your 529 plan.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.

 

@kcwojo 

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