Please help with this,please, client has two different 1099Q and 1098T

[shf1957]

Please help me, I am pulling my hair out   Have a dad with 2 children in college.  He has 2 1099q one in his name and one in his daughters name for her college.  The other child is a son and has more of a scholarship than the tuition and no 1099Q'

I 've had this over 3 weeks.. and keep doing it and getting different balances on the return.     Please help me ... I am trying so hard to follow this in steps.. and one time they owe 5200 and another time 429    somthing is wrong.

I put in the 1099Q on one  click it to her 1098t    then i do the next 1099Q click that to the same 1098t   then it shows on his 1040 a gain off the 1099Qs as being  a figure.  and I take the difference and minuis it from her tuition amount for the 1098T and it then shows a totally different amount of the Q as being taxable then the amouint i used to subtract  it initially

Please find it in your heart to help me,  I 've been doing this one too long and am so confused and maybe over worked.. i just don't get it.

[dascpa]

First off, a 529 plan is a trust.  It should be one account holder for one beneficiary. But we have clients who like to use one 529 to pay for the other child's college costs.

But aside from that understand that what can be used for the 529 as qualified expenses goes beyond the 1098-T.  Room and board being the largest cost.  So if you have $10,000 of tuition and $15,000 of 1099-Q you have potential tax on the earnings of the 529 until you enter in the extra qualified costs.  So, go back and get the room and board, the computer costs, etc. and after entering those see what the results are.  Every once in a while you'll have taxable earnings from the 1099-Q but in most cases it ends up being zero.

[shf1957]

 1099Q's  You see one is a gain of 16000 and the other is a gain of 11000.    I entered the first one... then clicked on dependent college info and entered everything.   Then I entered the second 1099Q and did the same.. (clicked on the same college 1098T)

Then I think I have to go to the 1098 T and subtract  the difference of what it shows of non taxable. .see that line on his 1040 states he's only paying tax on  like 4000..  so I take the college tuition amount of like 56000 and subtract  23000  ( which brings it to 33000 for tuition and hit the optimize button    BUT when i go to the front page again.. is shows that 4000 isn't taxable but like 11000.    Does that make sense to you or what am I screwing up;...    I am so sorry for bothering you... I seriously need help in this ..  

[dascpa · Accepted solution]

We cannot answer your specific question without being in front of your computer. 

Remember, you cannot double-dip so if you're claiming a AOTC or Lifetime Learning Credit you cannot use those same funds to get out of tax-free earnings on the 529.  You may find that you got an AOTC but then had to pay tax on the some of the 529 earnings.

Many times ProSeries enters a $10,000  on Part VI, line 17 of the Student Information Worksheet.  If it does override it to the proper number.

This is also the worksheet you need to pay attention to.  Look at the various columns; AOTC, LLC, 529, ESA, etc.  Make sure these are correct before doing the optimizer.

[shf1957]

That was the answer  it was that 10,000     I over rode it to ZERO... since there is NO  credit to take... and he has to pay the the extra amount that was left taxable on the front of the 1040.

THANK YOU SO VERY MUCH!!!!