529 WITHDRAWAL

[Anonymous]

When time to withdraw for tuition payments, did you have check sent to you or directly to the school? Is there a reason I should not have it sent directly to school?

[Anonymous]

Anonymous wrote:When time to withdraw for tuition payments, did you have check sent to you or directly to the school? Is there a reason I should not have it sent directly to school?

+ following

Oldest child heading to school in fall and we too would benefit from those with experience on how best to access our 529.

[Anonymous]

Most plans will send checks or ach transfers to colleges directly.

Toucan do it from the plan website.

Make SURE you include students ID a number assigned to them by the college.

[Anonymous]

It is best (less likely to trigger any questions from IRS) to send payments for qualified 529 expenses directly to the school rather than to the 529 account owner.

[Anonymous]

Keep in mind for K-12 withdrawals that most states will not send to directly to the school, they will only send funds addressed to the account owner. Even for college, its really not a big deal if you withdrawal to yourself rather than the school, you just need to keep good records in case you get audited

[Anonymous]

Anonymous wrote:It is best (less likely to trigger any questions from IRS) to send payments for qualified 529 expenses directly to the school rather than to the 529 account owner.

I (account owner) have been getting the checks but I agree with this. I have asked twice by IRS after my tax returns. Have them send it to school directly.

[Anonymous]

Anonymous wrote:Keep in mind for K-12 withdrawals that most states will not send to directly to the school, they will only send funds addressed to the account owner. Even for college, its really not a big deal if you withdrawal to yourself rather than the school, you just need to keep good records in case you get audited

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:It is best (less likely to trigger any questions from IRS) to send payments for qualified 529 expenses directly to the school rather than to the 529 account owner.

I (account owner) have been getting the checks but I agree with this. I have asked twice by IRS after my tax returns. Have them send it to school directly.

How do they even know? I don't remember there even being a place to report 529 withdrawals on your taxes? I guess maybe the plan reports the withdrawal?

[Anonymous]

The plan reports the withdrawal to the IRS on a form called the 1099-Q.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It is best (less likely to trigger any questions from IRS) to send payments for qualified 529 expenses directly to the school rather than to the 529 account owner.

I (account owner) have been getting the checks but I agree with this. I have asked twice by IRS after my tax returns. Have them send it to school directly.

How do they even know? I don't remember there even being a place to report 529 withdrawals on your taxes? I guess maybe the plan reports the withdrawal?

We don't do our own taxes but there is a schedule in our returns for 529 contributions and withdrawals. The 529 should be sending you a 1099Q.

As I recall, when we sent the payment directly to the school the 1099Q comes in DCs name and if we take the money out (like for living expenses) the 1099Q comes to us.

[Anonymous]

We've done it both ways (easier to send directly to school) and have never been asked anything by the IRS.

[Anonymous]

Anonymous wrote:We've done it both ways (easier to send directly to school) and have never been asked anything by the IRS.

Well, maybe you will get lucky next time.

[Anonymous]

We have the funds sent to us, then we put the money in our child's account and she pays the tuition bill. We do it this way because she lives in off-campus housing the also uses the money to pay rent/food (and yes, that's legit if the total isn't more than what she'd pay on campus.)