Ok, my kid enrolled in Expensive University this fall. I paid for the first two semesters and withdrew a similar amount (plus enough extra to cover the cost of the required laptop and books) from her 529 account. How does this all get reconciled. On MY return (I think the tax forms will come with her tax ID number) or on hers? She is a dependent of mine and I am a high net worth individual.
The 529 gets reconciled on the beneficiary's return. See IRS Publication
970. Save yourselves some time and don't try to figure out the 1098-T. Use your school account records.Phil
Sounds like good advice. I did look at Pub 970 but it's still not clear what form to use to reconcile what I spent versus the 1098-T
There is no form. You use a piece of scratch paper to perform the reconciliation. Any taxable amount would get reported by your child on Line 21 of the 1040 if the child had a reporting requirement. Page 55 of Pub 970 shows you how to determine if any of the earnings received is taxable. This can be very easy or it can get complicated if the child received scholarships, grants, any other form of tax-free assistance including the Higher Ed. Credits.
You said you paid for the first two semesters and withdrew an amount to cover that and required equipment and books. Assuming that there was no other tax-free assistance nor any tax credit due to your income being too high, there is nothing to reconcile as the amount withdrawn was all used to pay qualified expenses.
You don't. Just ignore the 1098-T; IRS does. The schools are uniformly awful at getting the numbers right, and the IRS acknowledges that. That's why you do your calculations from your records.
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