<p>Ok, I think need to bite the bullet and call the IRS because I'm confused about how to account for some expenses. </p>
<p>For example: if I don't buy S2 a meal plan how can I deduct some $$$ from 529 without receipts. I know there's an official "Cost of Attendance" with Room&Board, but that number seems really high - so surely I can't just take that amount without question..right? Nor can I imagine gathering up his fast food receipts for the semester :-)</p>
<p>Not expecting answers HERE..but should I just call the 1-800-IRS phone# or is there a specific 529-specialist office that I can contact? I would hate to rely on wrong answers to my questions - even from the IRS!</p>
<p>I cannot offer an answer to you, but I try to take a very careful approach when withdrawing money from the 529 account to pay for part of my D’s school bill. I figured out how much we need to pay after scholarships/grant and then look for an item very close to the remaining amount and withdraw that exact amount from the 529. That would make my book keeping really easy as there is just one (may be 2) qualified expenses to be paid by the 529. I just need to make sure the scholarships/grant would not exceed the total of other items qualified for tax exempted education expenses.</p>
<p>You can withdraw up to the budgeted R&B amount. Call the college S2 is attending and ask them for the budget for off campus R&B. Reciepts are not needed. </p>
<p>Recently did this for S1 living at home but going to CC. </p>
<p>Hmm…When DS was in college, I thought only tuitions and those fees paid by everybody taking the courses by you are qualified education expenses. The rule may have been changed since then. I am not sure.</p>
<p>In our case, the tuitions alone were enough to drain our not so large 529 account in less than 4 years so it was a non-issue for us.</p>
<p>But @mitchklong, is that only if my expenses are > that amount? That is the part that worries me…if I have to PROVE that my expenses are higher. </p>
<p>Ok, I couldn’t get a human at the IRS, but I got a nice guy at my 529 company Apparently there are ‘guidelines’ and not ‘rules’ which offends my crazed rule-follower personality. </p>
<p>Basically, you can go here: nces.ed.gov and get the COA with the limits.</p>
<p>I think the bottom line is do NOT exceed the COA values and they won’t question you. Of course EVERYONE says ‘consult your accountant’. I don’t have an accountant, but even if I did this seems like a niche area.</p>
<p>First of all, you’re lucky that you couldn’t get a human from the IRS on the phone. Nothing against IRS employees, but if you were to get someone on the phone, it’s highly unlikely that he/she would have the required expertise to adequately answer your question, and that’s assuming that they are willing to answer your question. For a crazed rule-follower seeking guidance, that’s not a good situation.</p>
<p>Pub. 970 is very good, and the answer to your question is in paragraph 3 near the top of the right column on pg. 56 of the link that you provide.</p>
<p>@MiddKid86, That’s just where the guy told me to look, but I would feel better if it said “No documentation of actual expenses is required.” :-).</p>
<p>The school’s COA also lists a ‘Misc’ item of approx $2000. I’m feeling braver and am inclined to take that one too.</p>
<p>I hope my kids will visit me in tax jail :-).</p>
<p>I’m highly doubtful that a COA item of “Misc.” would be considered a Qualified Education Expense for 529 purposes, unless it’s referring to books, supplies and equipment that are required for enrollment or attendance. In my experience, those items are usually mentioned specifically in COA lists, and “Misc.” refers to personal sundry items that a student will need (personal care products, laundry expenses, etc.) that are not QEE.</p>
<p>Yes- beware of “misc”. You are safe with lab fees, books, supplies required for a class (extra software, for example) which parents often think of as “misc”. But if the COA list uses the “misc” terminology for shampoo and detergent, you are pushing the envelope here.</p>
<p>The IRS does not require that this information be provided on 1040s. However, they can come back 2 years later and require that you submit evidence that you did not withdraw more than you had for authorized expenses. That just happened to me. Fortunately, my son’s college has good online records of all payments we ever made, which I printed out and sent in response. I also referenced the college’s official cost of attendance for food expenses and books, without needing to provide receipts. As stated above, if you don’t list extraordinary expenses that are higher than the cost of attendance, it should be OK. </p>
<p>Make sure you make 529 withdrawals during the same calendar year as you make the payments to the college. </p>