1099-Q, 1098-T...best way to report?

[Janitor Bob]

Client's son attended college in 2014.  Received 1098-T for $1,400.  Received 1099-Q showing $2,000 distribution.  According to client, the difference of $600 was used to pay for books/fees.  So if I understand correctly, the 1099-Q distribution is NOT taxable, but the client also does not get to claim any education credits...correct?

 

what is the best way to report the 1098-T and 1099-Q info on the return to avoid IRS matching issues and CP-2000?

[Abby Normal]

If you're not taking an education credit, the IRS won't try to match 1098T. My guess is they don't match 1099Q either because most of the time it's not taxable. ATX doesn't even have a worksheet for 1099Q. Just a line on Line 21 Other Income tab.

[Catherine]

Janitor Bob, your assumptions are correct.  Only amounts exceeding the distributions are eligible for those various deductions and credits.  

 

I always report on a Line 21 worksheet and then back it off on a second.  As Rita B said (I think it was her) in another thread, even though the worksheets don't transmit it gives *you* a memory trail of what you decided and why.  Plus you can always print the worksheet for the client.  We all have clients that want to know "where did you put this?" and you can point to the worksheet as proof that you didn't forget something crucial.