How do I get both the American Opportunity Credit and Interest free Series EE bonds for college expenses?

[adintravaia]

Do I have to all of my college payments on the 1098-T for the American Opportunity Credit?

[DaveF1006]

If you are asking if you have to report all the payments listed in box 1 of the 1098-T, the answer is yes and you should so you can receive the full credit. i don't know if this is what you are asking but if it is, then the answer is yes.

Now, I am not certain what question are you asking about the savings bonds. Are you asking how you report the savings bonds that you cashed in to pay for expenses? if so, here is how to report.

• Log into your account and click Take Me to My Return
• Go to federal>income and expenses>interest and dividends>show more
• Interest on 1099-INT>start
• Enter the initial details for the interest and click the small checkbox that indicates you have more information to enter
• Enter the savings bond interest in box 3 
• You will come to a screen “Tell us if any of these uncommon situations apply” - click none if none apply and click continue 
• The program will ask if you have more interest to enter - click No (if none)
• Now, you are going to come back to the screen “Here’s the interest we have so far” - click Done (this is the screen where you need to keep going)
• The next screen will ask “Did you cash in any Series EE or I U.S. Savings bonds?" - click Yes
• The next screen will ask “Did you use your U.S. savings bonds to pay for higher education expenses?” - click Yes
• The next screen will ask for details about the bonds you cashed.  Answer the qualifying questions and click continue to finish the interview

[Hal_Al]

You cannot "double dip".   You cannot use the same expenses to claim the interest exclusion from the savings bonds that you used to claim the  AOC.  But you may count qualified expenses that are not included on the 1098-T (most commonly books and computers). Room & board are not qualified expenses. 

For example if box 1 of 1098-T is 5,000 and you have $1000 of other expenses ($6,000 total) and you use $4000 for the AOC, you may only count $2000 for the savings bond calculation. 

[Hal_Al]

Got any more savings bonds?  There's a tax advantaged move available.

Instead of cashing and paying for college, directly, cash them and open a 529 account (within 60 days  and in the same calendar year).  The interest will not be taxed but the basis (interest) will be moved to the 529.  When you later withdraw money from the 529 plan, room and board are now qualified expenses. "Later" can be the same year.