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Old 01-30-2015, 12:44 AM
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529 Distributions to the parent instead of the account beneficiary (child)

So, my question is a very simple one but I have been searching for an answer for 4 hours on the internet only to find early complicated responses about the 529 in general. Here is goes.

I setup 529 distributions to go to me as the account owner, not my son as the account beneficiary. I did use all the funds to pay for his tuition/room/board and the money taken out did not exceed his qualifying expenses. So, now I have received the 1099Q for the year with my SSN listed as the recipient/beneficiary, not his. How do I report this on my tax return since I got the 1099Q? Based on what I read I will get taxed for taking a non qualified distribution. In other words, how do they know I used the money to pay for my son's education expenses.



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Old 01-30-2015, 01:04 PM
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I setup 529 distributions to go to me as the account owner, not my son as the account beneficiary. I did use all the funds to pay for his tuition/room/board and the money taken out did not exceed his qualifying expenses. So, now I have received the 1099Q for the year with my SSN listed as the recipient/beneficiary, not his. How do I report this on my tax return since I got the 1099Q?==========>>>>>>>>in general, anyone can be named the beneficiary of a 529 QTP account regardless of their relationship to the person establishing the account. You can even establish an account with yourself as the named beneficiary; You received Form 1099-Q since you received education benefits during a tax year and paid for school expenses from a 529 plan ;basically, as you can see, earnings are not subject to federal tax and generally not subject to state tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, books, as well as room and board. room and board is considered a required expense but there are restrictions, such as cost limits for off-campus housing and enrollment requirements (half-time or greater) for students; however, some of this amount may be taxable depending on how you spend the money. If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax returnon line 21 1040. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.


Based on what I read I will get taxed for taking a non qualified distribution. In other words, how do they know I used the money to pay for my son's education expenses.=========>>>>>>>>>needless to say, A paper trail is important; As long as you document what you paid each year, a deduction for both tuition and fees/ AOC or etc can be claimed when filing income taxes

You may be able to deduct qualified tuition and related expenses that you pay for yourself, your spouse or a dependent as a tuition and fees deduction.. Instead of a tuition and fees deduction, you may be eligible to use your tuition and fees expenses to claim: The AOC tax credit or the lifetime learning credit



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Old 01-30-2015, 01:14 PM
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Originally Posted by tim0476 View Post

I setup 529 distributions to go to me as the account owner, not my son as the account beneficiary. I did use all the funds to pay for his tuition/room/board and the money taken out did not exceed his qualifying expenses. So, now I have received the 1099Q for the year with my SSN listed as the recipient/beneficiary, not his. How do I report this on my tax return since I got the 1099Q? Based on what I read I will get taxed for taking a non qualified distribution. In other words, how do they know I used the money to pay for my son's education expenses.
sorry mybad; tuition and fee expense paid from tax-free withdrawal from a college savings plan cannot be deducted.



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