TurboTax problems with Education expenses and credits

dopps 2018-03-21 15:20:55 UTC #1

I am normally a big fan of TurboTax, but this year they really dropped the ball on Education expenses and credits. When I checked all forms after completing the usual interview, TT assigned all Education items to my older child, who has been out of school now for 2 years and wasn't even part of the interview, instead of my younger child who was the only one mentioned in the interview input. Second, TT calculated some excess distributions from my son's 529 that were thus added to my taxable income and assessed the 10% penalty. But I had NO such excess distributions, so I had to override some of the inputs. I am a financial advisor, and have taken education credits now for the 8th and last year of my children's college expenses, so I know what I am doing and am very familiar with 529's and the American Opportunity Tax Credit; thus I definitely have never taken excess distributions from any of my kids' 529's. Anyone else experienced something similar? Beware of this if you use TurboTax, and make sure you thoroughly check your work before filing if you have higher education expenses and credits!

gatoraa 2018-03-21 21:42:34 UTC #2

I have had similar issues with TT this year. I am in my 4th year of entering 529/Coverdell withdrawals for eligible expenses using TT and never had an issue....until this year. I chose to not enter any withdrawals or expenses this year. All my withdrawals are for eligible expenses so per the 1099 Q "Nontaxable distributions.....are not required to be reported on your income tax return".

dopps 2018-03-21 22:03:03 UTC #3

Skipping the Education module in TurboTax works if you have no taxable distributions AND you have no further expenses to use for the AOTC (which you did not withdraw from a 529). But you may not be able to skip this section if you want to claim the AOTC--so be careful and be sure to review the forms and worksheets!

mfrank 2018-03-24 16:38:36 UTC #4

I have not had problems with TT this year or last year, but I used a separate new login for each of my kids each year to avoid having TT import information from previous returns, which can generate errors.

gatoraa 2018-03-24 17:42:26 UTC #5

I'm not eligible for AOTC and was lucky enough to have enough in my accounts to cover all eligible expenses.

NoFanofTT 2018-07-08 11:18:25 UTC #6

I been using TT for years. But I have had it. It's July and I still haven't filed my 2017 taxes because I knew something wasn't right. With no significant changes to income or deductions I finished my return with an amount due over 1K. I couldn't believe it. I compared to last years return and noticed I didn't get the AOTC. Now months later with much investigating I find TT to be at fault. From what I have read I have to leave the information from my 1099Q off the return?

dcandmc 2018-07-09 01:36:10 UTC #7

Under normal circumstances, you wouldn't be entering any 1099-Q information on your tax return. Why did you enter 1099-Q information on your return? Did you have non-qualified expenses that were paid with 529 funds?

NoFanofTT 2018-07-10 00:50:20 UTC #8

I entered the 1099Q information as I do ever year. But to answer your question, no I did not have any non-qualified expenses paid with the 529 funds. The funds were used for tuition.

Thanks

dcandmc 2018-07-10 01:24:17 UTC #9

Where on your tax return (which form and line/s) do you enter the 1099-Q information, and why are you doing this if none of the 529 funds is used to pay for non-qualified expenses?