My "dependent" daughter received a 1099Q in her name for the funds sent to the college for tuition. We also have a 1098T and don't qualify for any additional deductions due to income limits. Is she required to put the 1099Q on her tax form (if she does-it reduces her refund)-I've read both ways-that it is required and that it isn't. Also-if she does enter it-it recommends entering the 1098T so that she won't be "taxed." BUT-when she enters that (which she entered before the 1099Q) it makes it so she OWES money on both federal and state?? She did NOT receive more scholarships/grants (box 5) than what the payments received for qualified tuition and related expenses (BOX 1) was and the additional amount on the 1099Q does not make her exceed this amount either.
1. Let's start with the 1099-Q. First apply all that you can to room and board, even if the student lived at home or off-campus. The college should have guidelines with expected expenses. See 529 for Room and Board.
After subtracting all the room and board, subtract tuition. and other allowed expenses. Is there any 1099-Q left over? Probably not from what you describe. Then, make a note of your calculations and tuck it into the tax folder with the 1099-Q. It does not need to be entered if it went to qualified education expenses. The IRS says not to report tax-free distributions.
2. The program is finnicky with the order in which forms are entered. The 1099-Q must come first, if it needs to be entered.
3. Box 5 scholarships and grants would be used toward any tuition, books, etc not already covered by the 1099-Q. If there is any amount of the scholarships not used up by education expenses, it would be taxable income to the student.
4. It sounds like adding your 1099-Q and box 5 together is less than all of your expenses. You don't need to enter anything.
1. Let's start with the 1099-Q. First apply all that you can to room and board, even if the student lived at home or off-campus. The college should have guidelines with expected expenses. See 529 for Room and Board.
After subtracting all the room and board, subtract tuition. and other allowed expenses. Is there any 1099-Q left over? Probably not from what you describe. Then, make a note of your calculations and tuck it into the tax folder with the 1099-Q. It does not need to be entered if it went to qualified education expenses. The IRS says not to report tax-free distributions.
2. The program is finnicky with the order in which forms are entered. The 1099-Q must come first, if it needs to be entered.
3. Box 5 scholarships and grants would be used toward any tuition, books, etc not already covered by the 1099-Q. If there is any amount of the scholarships not used up by education expenses, it would be taxable income to the student.
4. It sounds like adding your 1099-Q and box 5 together is less than all of your expenses. You don't need to enter anything.