topic 1099 -Q TAXABLE in Retirement tax questions

1099 -Q TAXABLE

pallakr — Mon, 03 Jun 2019 17:40:15 GMT

When I enter the 1098-T and 1099-Q of my college dependent who made more than 7000$ last year Turbotax tells me that it looks like 1099-Q is taxable.Followed by that "Student Beneficiary must report xxxx$ of taxable income from this distribution". She has already filed a 1040ez. Any answer is appreciated

Was the tuition and books after scholarship/financial aid...

MichaelDC — Mon, 03 Jun 2019 17:40:16 GMT

Was the tuition and books after scholarship/financial aid more than the 1099-Q distribution?

Well I have virginia Prepaid which sent me the 1099-Q...

pallakr — Mon, 03 Jun 2019 17:40:17 GMT

Well I have virginia Prepaid which sent me the 1099-Q but I paid for Books 1000$ approx

Thanks. Let me know if you need anything else.

MichaelDC — Mon, 03 Jun 2019 17:40:19 GMT

Thanks. Let me know if you need anything else.

So does dependent still have report xxxx$ of taxable inc...

pallakr — Mon, 03 Jun 2019 17:40:20 GMT

So does dependent still have report xxxx$ of taxable income from this distribution in her tax filing

sorry I just read your reply so ignore my comment

pallakr — Mon, 03 Jun 2019 17:40:25 GMT

sorry I just read your reply so ignore my comment

Actually I had one question . My dependent filed a 1040ez...

pallakr — Mon, 03 Jun 2019 17:40:26 GMT

Actually I had one question . My dependent filed a 1040ez as she made more than 7000$ last year. She did check "someone else can claim as a dependent" I was not sure at that time but I had her enter the 1098-T as it was in her name.Turbotax did some calculation and displayed something we did not read it properly and filed her taxes online. We saved a copy of her filing. Now when I am doing my tax I realize I am supposed to enter the 1098-T. Will my dependents copy say if the 1098-T information was already sent to IRS and How can I verify that? Or should I have her do a amend? Thanks in advance for the feedbacks

Yes. She should get notification of being accepted by the...

MichaelDC — Mon, 03 Jun 2019 17:40:27 GMT

Yes. She should get notification of being accepted by the IRS; check the email which was connected to her TurboTax account. There's a chance that no amendment is necessary. Check for entries on her 1040 Lines 50 and 68.

I looked at her copy it was 1040EZ and it did not have Li...

pallakr — Mon, 03 Jun 2019 17:40:28 GMT

I looked at her copy it was 1040EZ and it did not have Lines 50 and 68 so guess 1098-T was not in her filing. Thanks a lot

More than a pleasure. Good Luck!

MichaelDC — Mon, 03 Jun 2019 17:40:30 GMT

More than a pleasure. Good Luck!

If your Distribution did not exceed your Qualified Educat...

MichaelDC — Mon, 03 Jun 2019 17:40:31 GMT

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.

Re: 1099 -Q TAXABLE

thecoons — Tue, 28 Jan 2020 01:33:59 GMT

My son's expenses exceeded his distributions from his 529, but what I found is that I am still being charged some taxes even though I entered both 1099-Q distributions and 1098-T qualifying expenses to show this was the case. It seems like it is best to follow the recommendation to just leave the 1099-Q out altogether when you know and can prove your college expenses exceeded your 529 distributions for the year.