- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
If your Distribution did not exceed your Qualified Education Expenses then you don't have to enter the information from 1099-Q at all.
If the Distribution doesn’t exceed the amount of the student's qualifying expenses , then the distribution is not Taxable and you don't have to report any of the distribution on your tax return . I understand that this sounds strange, especially regarding taxes, but the IRS does not request any additional information to substantiate whether or not your Distribution exceeded your actual qualified expenses. Nevertheless it would be wise to keep a good record of these expenses just in case your return gets picked up for examination.
To correct this issue simply remove the information from the 1099-Q, or if you like, TurboTax allows you to substantiate this information by countering the amount from the Distribution by entering Education expenses. You can find the Education Expenses Section under Deductions and Credits. This is where you enter the qualified education expenses you paid with the 529 distribution. Make sure you follow all the way through this interview.
(If you don't complete the Education Expenses & Scholarships interview in Deductions and Credits,then the interest amount of the 1099-Q will be included in taxable income.)
Please feel free to post any additional details or questions in the comment section.