Adjusted Qualified Higher Education Expenses Applied

[ladenfj]

why is turbo tax not including all of the tuition (via 1098T), room and board, books and fees, when calculating the Adjusted Qualified Higher Education Expenses Applied when comparing it to distributions form a 529? its not including all of these amounts and showing some of the distribution to be taxable.

[JillS56]

It depends.   Box 1 of the 1098-T is the payments received for qualified tuition and related expenses.   Box 5 are scholarships and grants received by the student.  The scholarship amount in Box 5 is subtracted from the amount in Box 1,   The is the amount of tuition/expenses that the 529 Plan funds would be applied.  When TurboTax is apply the 529 Plan funds it is only looking at the tuition/expenses.   Room and board, transportation, and meals are not used in calculating the Adjusted Qualified Higher Education Expenses applied when compared to the distribution from the 529 Plans funds.   

After applying the 529 Plan funds there is still a balance of tuition/expenses, then this amount is used to determine the amount of education credit.   On the other hand, if the amount of scholarships in Box 5 and the 529 Plan Funds exceed the total qualified tuition/expenses in Box 1, then this amount is reported as income on the return.

Reporting 529 Plan

[ladenfj]

interestingly, Box 1 of the 1098T is greater than the amount that is on the 1099Q, but turbo tax is still showing a taxable amount. Additionally, room & board and books are qualified expenses, but do not get reported in Box 1 of the 1098T. Even after I add these in, Turbo Tax is showing a taxable amount.   I can't figure it out.  maybe there is a glitch in the software.

[RobertB4444]

You are probably better off having someone walk through the return with you to look at your entries so I recommend getting live expert help.

Here is a link to finding a TurboTax expert.

However, that requires upgrading your product which may be an expense you don't want.  In that case you can call an expert and ask questions over the phone.

Here is a link to the TurboTax Phone Number.