Question

529 distributions are supposed to be tax free, so why did my refund just drop by $2000 after entering the information from my 1099-Q?

Forum|Forum|5 years ago
February 7, 2021
1 reply
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All of the distribution was used for qualified education expenses.

TurboTax Self Employed Online

When you enter the 1099-Q, you need to go through the step-by-step interview and tell the TurboTax program that the funds were used for education.

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A

archi-dadAuthor

Thanks, but I'm pretty sure I had done that when going through the entire set of questions. I remember answering questions about education expenses. But then I received the 1099-Q in the mail, got back onto Turbotax's website, did a search for where I should enter 1099-Q information and found it. So I then went through that set of questions and filled it out with the form's info. That's when the refund dropped. Is it possible that the data is somehow entered twice now?

KrisD15

Yes, sounds that way. If you first reported the amount form the 1099-Q in the education section WITHOUT the 1099-Q and then entered the 1099-Q, the program would double it.

If you reported the distribution correctly in the Education Section without using the 1099Q, you may delete the 1099-Q

The 1099-Q is a reporting tax form, but is not attached to a tax return, so it doesn't need to be entered on the 1099-Q screen as long as the program has the numbers to do the calculations.

OR

You can enter the 1099-Q and then go back through the education interview to adjust the answers and amounts you previously reported. If you choose to do this, PLEASE MAKE SURE you go through the ENTIRE interview and finish with the "Maximize My Tax Break" screen.

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