topic I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside the US. How do I properly record this in Turbotax? in Education

I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside the US. How do I properly record this in Turbotax?

mfriedma — Thu, 01 Apr 2021 08:35:23 GMT

There is no 1098-T in this circumstance.

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

ReneeM7122 — Thu, 01 Apr 2021 15:31:04 GMT

To report the distribution of a 529 to pay for your child's private school tuition at a school outside the US, you should enter the information as though you had received a 1099-Q.

Here's a TurboTax article that explains the form, and here are instructions about how to enter the information.

Here's a TurboTax article about 529 plans.

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

mfriedma — Thu, 01 Apr 2021 15:40:42 GMT

Hi. I have a 1099-Q - that got issues by the 529 Plan administrator when I made the withdrawal.

But how do I make it clear that I spent the money on private school education? I have no 1098-T.

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

Hal_Al — Thu, 01 Apr 2021 22:00:09 GMT

If the amount was less than $10,000 and it was all spent on tuition, just don't enter the 1099-Q in TurboTax.

When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records

On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

mfriedma — Sat, 03 Apr 2021 00:19:29 GMT

So if you didn't use all of it for education expenses then you need to adjust the 1099-Q proportionately before entering it?!?

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

Hal_Al — Sat, 03 Apr 2021 00:45:50 GMT

Q. So if you didn't use all of it for education expenses then you need to adjust the 1099-Q proportionately before entering it?

A. No.

You enter the1099-Q exactly as received. Then you enter your expenses. TurboTax will calculate the taxable portion of the 1099-Q. It helps to have an idea of what that output will be. Although, the entering of educational expenses is simpler for elementary and High school students than it is for college students.

.
Example:
$8,000 of qualified educational expenses

Box 1 of the 1099-Q is $10,000

Box 2 is $3000

8000/10,000=80% of the earnings are tax free; 20% are taxable

20% x $3000 = $600

You have $600 of taxable income plus a 10% non qualified distribution penalty (10% x $600 = $60). The income goes on line 8 of Schedule 1. The penalty goes on line 8 of form 5329.

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

mfriedma — Sat, 03 Apr 2021 01:08:39 GMT

So I entered expenses for non-college secondary school. I said that I was exempt from the 1099-T requirement. Was that correct?

Will Turbotax properly apply the non-college school expenses to the 529 withdrawal?

Re: I used a 529 Plan withdrawal to pay for my child's private school tuition at a school outside...

Hal_Al — Sat, 03 Apr 2021 11:01:01 GMT

You are not asked about a 1098-T, in the secondary education section. You're in the wrong place. Delete that educational info. TT will not handle it properly if you enter expenses in the college section. Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary". Click delete next to the student's name.

Enter the 1098-Q. You will be asked what level of school the student-beneficiary attended. When you answer secondary-high school, you will be given a single screen to enter all your expenses.