This is such a helpful thread! I'm dealing with the exact same situation with my son who's a sophomore at college. One thing I learned the hard way is to keep really detailed records of what you paid for with 529 funds versus out-of-pocket expenses. I created a simple spreadsheet tracking tuition payments, required books, room and board, and other qualified expenses, then noted which ones were paid with 529 distributions versus cash/credit card. This made it much easier when I had to coordinate the American Opportunity Credit with the 529 withdrawals. Like others mentioned, you can't use the same expense for both benefits, but having good records lets you optimize which expenses to allocate where. Also, don't forget that room and board costs can count as qualified 529 expenses if your student is enrolled at least half-time, even if they live off-campus (up to the school's published room and board allowance). This was a nice surprise that helped me use more of our 529 funds tax-free!

Great advice from everyone here! I went through this exact situation last year with my daughter's first year of college. One additional tip that might help - if your daughter has any scholarships or grants, make sure to account for those when calculating qualified expenses for both the 529 distribution and education credits. Tax-free scholarships reduce the amount of qualified expenses you can claim, so if she received $3,000 in scholarships and had $15,000 in tuition, you can only use $12,000 for tax benefits. This coordination gets tricky but is crucial for staying compliant. Also, since your daughter made $9,800 from her part-time job, she'll likely still need to file her own return even though you're claiming her as a dependent. Just make sure she doesn't accidentally claim any education credits on her return - those should definitely go on yours since you're the one claiming her as a dependent. The good news is that once you figure out the system, it becomes much more straightforward in subsequent years. Keep detailed records of all education expenses and 529 distributions throughout the year - it makes tax time so much easier!

This has been such a valuable discussion! As someone who's been handling 990-PF filings for a small family foundation for about 8 years, I wanted to add my perspective on a few points that have come up. Regarding the parallel preparation approach that Chloe mentioned - I actually did this two years ago when switching from TaxAct to a different platform. I prepared our return on both systems and found some interesting discrepancies in how they calculated our minimum distribution requirement. It was eye-opening and gave me confidence in the new platform when both returns were accepted by the IRS without issues. For those considering taxr.ai, I've been using it for the past year and can confirm the investment reporting automation is excellent. What I didn't expect was how much their built-in compliance checking helped - it flagged a potential issue with how we were reporting grants to individuals that could have triggered an audit. One additional money-saving tip: if your foundation makes grants primarily to established 501(c)(3) organizations (rather than individuals), consider timing your grant distributions strategically. Making grants early in the tax year can simplify your investment income calculations and sometimes reduce the complexity of your 990-PF preparation, which might allow you to use simpler (cheaper) software options. Also, for anyone in the northeast region, the Foundation Center (now Candid) sometimes offers workshops specifically for small foundation administrators that include software demonstrations and group discount opportunities.

I've been preparing 990-PFs for our small community foundation for the past 6 years, and this discussion perfectly captures the frustration we all face with filing costs! One option I haven't seen mentioned yet is ProConnect Tax Online's nonprofit module. Last year they offered 990-PF e-filing for around $95, and what I really appreciated was their detailed interview process that walks you through each section systematically. It's especially helpful for the tricky parts like excess business holdings and jeopardizing investments that smaller foundations don't deal with often. I also wanted to second the recommendation about joining professional organizations for software discounts. Our foundation joined the Association of Small Foundations, and while the membership is $200 annually, we've saved more than that through their group purchasing agreements with various software providers. For anyone still on the fence about switching from paper filing (if you somehow still can), the IRS has been pretty clear that electronic filing is mandatory now for almost all 990-PF returns. The few exceptions require demonstrating significant hardship, which is nearly impossible to qualify for. Has anyone dealt with the new cybersecurity requirements that went into effect this year? I'm wondering if the newer platforms like taxr.ai have built-in compliance features for these regulations, since that's becoming another layer of complexity for foundation reporting.

I successfully resolved an APTC repayment issue through Form 14095 (The Health Insurance Marketplace Statement). My situation was similar - I had received $2,340 in Premium Tax Credits for 8 months while simultaneously covered under my spouse's employer plan. I submitted documentation showing the overlapping coverage periods and requested a retroactive termination. The Marketplace approved it in May 2023, issued a corrected 1095-A, and I filed an amended return that eliminated the repayment requirement entirely.

This is unfortunately a very common situation, and you're definitely not alone in facing this challenge. The key thing to understand is that the marketplace doesn't automatically know when you get employer coverage - you have to actively cancel or update your enrollment. However, you still have several potential options to explore: 1. **Contact the Marketplace first, not the IRS** - Call Healthcare.gov at 1-800-318-2596 and request a "retroactive termination" for the date your employer coverage began. Explain that you had qualifying employer coverage and never used the marketplace benefits. 2. **Gather documentation** - Get a letter from your employer showing your coverage start date, copies of your premium payments to them, and any W-2 forms that show health insurance deductions. 3. **Check for notices** - Review if the Marketplace sent you any income verification requests or other notices during 2023 that you may have missed. Not responding to required verifications can sometimes provide grounds for appeal. 4. **Consider reasonable cause** - If you can demonstrate you made a good faith effort to report the change or had reasonable cause for the delay, the IRS sometimes provides relief. Don't pay immediately - exhaust these options first. Many people have successfully gotten their APTC repayments reduced or eliminated entirely through proper documentation and appeals.

Just want to add that you should double-check which specific investment account generated this K-1 by looking at the EIN (Employer Identification Number) on the form. You can then cross-reference that EIN with your investment statements or call your brokers directly. I had a similar situation where I got a K-1 from a company I'd never heard of, and it turned out to be buried deep in one of my target-date funds. The fund held a small position in an MLP that I had no idea about. Once I figured out which account it came from, everything made sense. Also, keep in mind that some investment platforms will send you a consolidated 1099 that includes K-1 information, while others send the actual K-1 forms separately. If you're getting the actual K-1 directly from Cedar Point, it means one of your funds likely has a significant enough position that they're required to pass through the partnership reporting to individual investors. Don't stress too much - this is just part of having a diversified investment portfolio! The tax software should handle it fine once you know what you're dealing with.

Hey Angel! I went through almost the exact same thing last year and it was so confusing at first. What everyone else said is spot-on - you're getting that K-1 because one of your investment accounts holds shares in Cedar Point Amusement Group (which is structured as a partnership for tax purposes). Since you mentioned inheriting investments through National Investment Fund that's managed by a broker, that's probably where the connection is. A lot of managed accounts and funds include MLPs (Master Limited Partnerships) in their portfolios without investors realizing it, especially in diversified funds or income-focused strategies. Here's what I wish someone had told me: definitely call that broker managing your inherited account and ask them specifically about the Cedar Point position. They can tell you exactly how much you own and help you understand how it fits into your overall portfolio. They should also be able to help you with the tax reporting since they deal with K-1s all the time. Also, don't panic about the complexity - most modern tax software handles K-1s pretty well now. Just make sure to use a version that supports Schedule E reporting (which is where K-1 income goes). The good news is once you understand it this first year, future years will be much easier!

I'm going through this exact same situation right now with my twins both starting college this fall! The responses here have been incredibly helpful, especially the clarification about timing withdrawals with beneficiary changes. One additional tip I learned from my 529 plan administrator - some plans have online portals where you can make beneficiary changes instantly, while others require paper forms that can take 1-2 weeks to process. If you're planning to make multiple beneficiary changes throughout the year, it's worth checking how quickly your specific plan can process these changes. Also, I've been keeping a simple spreadsheet tracking each child's expenses by month, when each was the beneficiary, and which withdrawals correspond to which expenses. It's made the whole process much less stressful knowing I have everything documented clearly. Thanks to everyone who shared their experiences - this thread has given me so much more confidence about managing multiple kids' college expenses with one 529 plan!

This thread has been incredibly informative! I'm a tax preparer who works with a lot of families dealing with multiple college students, and I want to add a few important points that might help others: First, regarding the 1099-Q reporting - different 529 plan administrators handle this differently. Some issue separate 1099-Qs for each beneficiary who received distributions during the year, while others only report to the year-end beneficiary. Make sure you understand your specific plan's reporting method before planning your beneficiary changes. Second, don't forget about the kiddie tax rules if your children are under 24 and still dependents. Non-qualified 529 distributions could potentially be subject to these rules, so proper planning is crucial. Finally, I always recommend my clients consult with a tax professional before implementing complex 529 strategies, especially when coordinating with education tax credits like the AOTC. The interaction between these benefits can get tricky, and a mistake could be costly. The documentation strategies mentioned here are excellent - keep detailed records of everything!