Pulling Hair Out doing Taxes & 1099Q Questions

Paying for College
1

<p>Using Turbo Tax and attempting to do my son's taxes but TT not clear on where some of the below info goes! </p>

<ul>
<li>He's a full-time student</li>
<li>He was claimed as a dependent on my taxes for 2010.</li>
<li>He had earned income of just over $6,800 for 2010 working two part-time jobs.</li>
<li>He attends U of Florida and lives off campus (we live in a diff city in FL.)</li>
<li>He received a 1098T & a 1099Q (FL College Prepaid Acct)</li>
</ul>

<p>1098T= $4100 (box 1) $3264 (box 5) for State Bright Futures Scholarship
1099Q= $3248 (box 1) $981 (box 2) $2267 (box 3) FL College Prepaid Account</p>

<p>My question is....does he have to report any of the 1099Q distribution of $3248 or the $981 earnings on his taxes? Also, is he taxed on the remaining money from his College Prepaid Account & Bright Futures Scholarship after all tuition & fees are paid or can he use his off campus rent expense as a qualified expense?</p>

<p>The Bright Futures Scholarship distribution (on 1099T box 5) paid for most of his tuition & fee expenses except for $836 with the FL Prepaid paying for the remainder. Both distributions are paid directly to the school with any remaining balance returned to my son after all tuition & fees are paid for.</p>

<p>After all tuition & fees were paid, this left him with approx $2400. If I'm not mistaken, his off campus rent qualify's as a college expense for which the remaining $2400 can be applied.</p>

<p>Thanks for any help!</p>

2

<p>My understanding is that he does not have to report the 529 distribution or the earnings if used for college expenses including room and board.</p>

3

<p>Room and board are qualified expenses for 529 account distributions. The amount that is a qualified expenses is limited to the actual room and board paid if the student lives on campus, or, if the student lives off campus, the amount is limited to the room and board amount included in the school’s COA.</p>