The 529 question tree is incomplete. When will TT fix it? Why isn't grad/professional school on the list of 'school did you attend'? Where do you input room&board?

Forum|Forum|4 years ago
May 16, 2021
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529 plans can be used for foreign universities, but they don't give 1098-T. TT creates a 1098-T if you put in the tuition you paid, which is net of the fellowship since that's how the school bills you, but then TT asks for the fellowship amount. And there's more. One "Best Answer" in the community says that if you carefully calculated the amount to withdraw based on your actual allowed expenses, you don't have to report the 1099-Q or the 1098-T. That does NOT seem like a best answer, either. This is an area where TT has a long way to go to earn the amount it charges.

TurboTax Premier Online

Hal_Al

Employee

Q. When will TT fix it?

A. There are no current plans to fix it. So far, nobody has convinced them it's broke.

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. 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. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip!

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."