The institution is generally required to make this allocation and provide you with the amount you paid for qualified education expenses on Form 1098-T. The 5329 entry flows to Form 5329, line 5 and the software figures any “additional tax” which will then flow to:įor more information about the computation of the taxable amount, please see Publication 970, Tax Benefits for Education, and the Instructions for Form 1099-Q, Payments from Qualified Education Programs. qualified education expenses and how much you paid for personal expenses, such as those listed earlier, contact the institution. screen 3, line 8q or 8z (depending on the type of account).Manually compute the taxable distribution, if any, and enter it directly on both: If you let the software do the distribution computation, do not enter the taxable amount of the distribution directly on line 5 of screen 5329, as it will be added to the taxable amount already computed. You can choose to Force 5329 on the bottom right of the 5329 screen. Otherwise, Form 5329 is not produced automatically. Form 1040, line 59 in Drake17 and prior.Schedule 2, line 6 in Drake19 and Drake20.Schedule 2, line 8 in Drake21 and Drake22.The “additional tax” on the amount flows to: Form 1040, line 21 in Drake17 and prior.Schedule 1, line 8 in Drake19 and Drake20.Schedule 1, line 8q or 8z (depending on the type of account) in Drake22.If there is a taxable distribution, the taxable amount flows to Form 5329 line 5 and to: The software will compute the amount of distribution that is taxable. If you withdraw funds from a health savings account (HSA) but do not use them to cover out-of-pocket medical expenses, use Form 5329 to report this and calculate the penalty. 529 - 2 (i) (2) establishes a safe harbor for meeting the excess contribution rule. Use Form 5329 to report withdrawals from a 529 plan or Coverdell education savings account (ESA) not used to pay for qualified educational expenses. If the plan so provides, room and board also qualifies (within certain limits). There are two options detailed below.Ĭomplete Part II – Education and ABLE Accounts on screen 5329. As discussed below, these expenses include tuition, fees, books, supplies, and equipment, including the beneficiary's computer. This might be entered on screen 5329, Additional Taxes on Qualified Plans, and possibly also on screen 3. Where can I enter data for a 1099-Q, Payments from Qualified Education Programs?
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