The referenced post also was someone that unnecessarily filed 1099-Q and 529 expense information into turbo-tax so I do wonder if those that are getting CP2000's are only those that are unnecessarily filing information that is causing the query.Thank you, MoreTaxes, for your care and effort. We got a CP2000 asking about the distribution. After rounds of letters back and forth, IRS agreed that we did not owe any taxes. But boy was that a hassle. Therefore we are nowhere as brave as Zipster now.The simplest thing to do is to ignore all 529 questions in TurboTax, which in my experience screws things up and needs various manual corrections. As long as all of your distributions are qualified and below the published COA, I think you can just skip it in TurboTax.I agree with xzhou, that the taxes are a lot simpler if you distribute the payment directly to the school. Second best would be to distribute directly to the student. If you distribute to yourself, Vanguard will send you a 1099-Q. TurboTax, to name one program, is going to ask you to enter the 1099-Q and it will treat this distribution as income unless you also separately enter eligible expenses in this amount and carefully note that your child is a full-time student, etc.
Similar situation was reported in viewtopic.php?t=420911
You aren't required to report qualified 529 withdrawls. Doing so increases your chances of making an error and increases the IRSs chances of getting confused and sending a query.
Statistics: Posted by SmileyFace — Tue Aug 20, 2024 9:10 pm — Replies 14 — Views 780