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So 2nd yr we moved money into our account and then paid it to school which alleviated the stress( at least that worked), but when it was all said and done listing that as income and then listing college expenses ended up costing approx 400 in extra taxes.
Okie Dokie, Since I just paid the bill, I disagree (now my verbage may be wrong on "income" but it does have to go on the tax forms as well as expenses and as your "other" income rises you lose some major advantages and can even take a financial hit as listed above.
Ill let my accountants know.
"Yes, you do have to report 529 withdrawals (they are reported on form 1099-Q) to show to the IRS that the amount is nontaxable because you spend it for qualified education expenses."
"Grants/scholarships can NOT be used for room and board."
However, I am told that if I have released directly to university in future this will not be reported to me and I will have no tax liability.
3puppies so why are people taking withdrawals? Maybe most for off campus housing/books?