1098-T

[sw16]

I have a suspicion my son's 1098-T is incorrect, however, I want to ask about box 4 on the 1098-T.  If this has a number, does it mean the school adjusted the amount of tuition paid in 2023?  Assuming it's correct (which I don't think it is) could we be liable for taxes on the money we took out of the 429 account?  Does Turbo Tax automatically figure out that tax/penalty and include it in your total?

In 2023, I made 3 tuition payments in one year based on when bills posted - but it was all for 2023 taxes.  (ex:  I paid in Jan 23 I paid for Spring 2023 semester, in Aug 23 I paid for Fall 2023 semester, and then in Dec 23 I paid for Spring 24 semester.  I included all this on my taxes last year; it all equaled out with all the forms.  Does that seem ok?  I was told get the money out of the 529 the same year you pay it.  I didn't think it mattered if I paid a little early because bills post in Dec.  Does that seem correct?

Thanks!

[KrisD15]

Yes, you can pay for classes of that year and/or classes that start the first three months of the following year. 

You can pay in December for classes that start in January (or February or March).

The last year, you might want to pay the following year (in January) in order to have expenses for a credit that year, but it depends on how much expenses are paid each year. 

Box 4 can be all sorts of adjustments, such as dropping a class. You would need to ask the school what it is for. TurboTax does not do anything with Box 4 since it does not know what the school put in there. 

Remember that a 529 distribution can be allocated to Room and Board. Room and Board makes a distribution non-taxed but not so when allocated to a scholarship.