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Question on 529 plan and how to use them


Replies to: Question on 529 plan and how to use them

  • cptofthehousecptofthehouse Registered User Posts: 27,430 Senior Member
    The IRS 1040 forms do not have the lines to show the match ups so it’s up to you to make sure that they do match. It’s not just in case of an audit. You can get inquiries about things that are not audits but requests for substantiation of something.
  • BelknapPointBelknapPoint Registered User Posts: 4,260 Senior Member
    so there is no compulsory matching of distributions(1099-Q) to QEE (1098-T) to IRS.
    It is only if IRS audits. right?

    If you are using 529 money to pay room and board expenses, there will never be a 1099-Q and 1098-T match. A 1098-T does not report money paid for room and board.
  • rtr90jkrtr90jk Registered User Posts: 15 Junior Member
    Thanks to everyone for enlightening me. I will take one distribution before Fall semester and one in Dec to true up 2019. I do want to use up the collegesavings.com 529 first before I touch the coverdell ESA.
  • LMK5LMK5 Registered User Posts: 92 Junior Member
    One other thing to watch out for: When the school sends you a bill, it may not have the scholarship amount reflected yet. For instance, my D has a $1500 per semester scholarship, so when I receive a bill for the semester tuition, I withdraw from the 529 that amount minus the $1500. The $1500 credit from the school shows up on the bill's due date. If I didn't do it this way I'd have $1500 in unqualified 529 withdrawals.
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