Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

I had a Texas Tomorrow Fund account for my son. Due to going…

Customer Question
Hello. I had a...

Hello. I had a Texas Tomorrow Fund account for my son. Due to going to junior college and us paying out of pocket for that and only using the Tomorrow Fund when he went to the university, he was able to graduate with funds remaining. I understand I can request the balance in the account be paid back out to me, the purchased. Will I have tax issues around this?

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

No, not that I can think of. Thank you

Submitted: 3 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 34 minutes by:
3/28/2018
Tax Professional: Lev, Tax Advisor replied 3 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,111
Experience: Taxes, Immigration, Labor Relations
Verified

For distribution NOT used for qualified educational expenses - there will be tax liability.

Your original contribution will be distributed tax free - as it was never deducted.

Earnings will be taxable - and reported as ordinary income.

In additional - these earnings will be subject to 10% penalty.

Under some circumstances - you may leave the money in the fund and change the beneficiary.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,111
33,111 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
I believe the 1098-T I received for my daughter is
I believe the 1098-T I received for my daughter is incorrect. Her tuition/fees are paid through a guaranteed tuition plan (Texas Tomorrow fund) I set-up when she was born. The problem is with Box 5 (S… read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
Question for Tax attorney and or Estate planning .... My son
Question for Tax attorney and or Estate planning ....My son wants to invest some money that looks quite fruitful but he's only 17. I cant do it in my name since with my divorce I'm imputed income and … read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,457 satisfied customers
My son and daughter in law are divorced. Their daughter
My son and daughter in law are divorced. Their daughter (currently a junior in High School, will be applying for a FAFSA loan. My daughter in law is asking my son for his tax return or W-2. Does she n… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
You have answered a question by another customer regarding
You have answered a question by another customer regarding the use of 529 plan funds to pay for room and board at a "deferment only" foreign university. My question is somewhat different. Here it is: … read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
I live in Texas. Years ago the Texas Tomorrow Fund was
I live in Texas. Years ago the Texas Tomorrow Fund was purchased to pay for college for my son. He began college this past fall. The fund was used to pay the tuition bill directly to the school. The m… read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
I had a UTMA account for my sons college education. He graduated
I had a UTMA account for my son's college education. He graduated in May 2009. I was living overseas at the time and and did not use the UTMA account while he was in college, rather I just used my per… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
My family, including a daughter live for the whole years of
My family, including a daughter live for the whole years of 2012 in Manila, Philippines. My daughter in 2012 attended her first year of college at the De La Salle University, Manila. no income aside f… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,416 satisfied customers
I am a divorced mother of 2-my oldest is in college and my
I am a divorced mother of 2-my oldest is in college and my youngest is finishing his junior year at a private high school. Their dad is responsible for the tuition. I have money in a tomorrow's schola… read more
fastfile
fastfile
Tax Advisor
Master's Degree
550 satisfied customers
My College Son is the recipient of a college fund from his
My College Son is the recipient of a college fund from his Grandmother end last year and beginning of this year. He is filed under our year joint tax return as a dependent since he is a full time stud… read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
My son receives the Florida Bright Futures scholarship for
My son receives the Florida Bright Futures scholarship for tuition only, about $1,500 per semester, so we still pay the balance due. Do we need to include this scholarship amount on our 1040?… read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
Hello I am a citizen of India, and I graduated with my PhD
Hello I am a citizen of India, and I graduated with my PhD in 2009 after 6 years in an NY University. I am currently employed on Optional Practical Training (OPT). Question: Am I a US resident for tax… read more
Lev
Lev
Tax Advisor
33,111 satisfied customers
The new federal tax deduction for college tuition applies only
The new federal tax deduction for college tuition applies only for tuition. Unfortunately, not knowing the new law and because of convenience, during the past year we paid my son's tuition directly fr… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
529 fiduciary responsibility of parent - my ex-wife is the
529 fiduciary responsibility of parent - my ex-wife is the Account Owner for each child's (3) 529 VCSP/College America account also in their names. Child 1-stepdaughter from previous marriage. settlem… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
In 1998, I purchased a Texas Tomorrow Fund account for my nephew.
In 1998, I purchased a Texas Tomorrow Fund account for my nephew. He graduated from high school in May of 2008 and began making poor decisions with his life. I cancelled the account and received all o… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
Our son is 21 years old and needs to apply for fafsa student
Our son is 21 years old and needs to apply for fafsa student loan. He needs our tax info. We are not in the position to give him that info. How can he apply on his own without our tax info. He needs t… read more
Dave Z
Dave Z
Self-Employed
Bachelor
418 satisfied customers
We opened 529 plans under a custodial basis for two daughters
We opened 529 plans under a custodial basis for two daughters when they were both minors. The eldest is now 22 years old, graduated and has entered the real world with a job at J.P. Morgan Chase. When… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
What happens to my student loans when I withdraw from class
Hello there, I went through a similar situation with my child. What happens is that you will withdraw, and the institution will process your account. There is a formula that the institution uses to fi… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
We purchased the Texas Tomorrow Fund (pre-paid college ...
We purchased the Texas Tomorrow Fund (pre-paid college tuition program) for our son. We received a 1099-Q showing (1) gross distribution $5095.99; (2) earnings $2378.07; and (3) basis $2717.92. The $5… read more
Christopher Phelps
Christopher Phelps
Sole Practitioner
Master Degree
1,180 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x