miltonguy

I think I need an accountant or tax guy but wanted to post this on the forum in case anyone else has already addressed this issue. We have tried to plan for college by buying US savings bonds, Florida Prepaid tuition, and pushing our son to get the 100% bright futures. I am confused after reading some tax laws. According to the American Opportunity Tax Credit (Mr. Obama's replacement for the Hope Credit), you cannot use room and board expenses as a qualified expense to receive the credit (up to $2500). The US savings bonds web site has similar language that bonds are not tax exempt if used to pay for room and board. Thus the largest expense (room and board) cannot be used by any of my college planning unless I am totally misreading the IRS publications / other tax websites.

Anybody else already been down this confusing road??

Miltonguy

RachelUCF13

The way I understand it, and the way I plan on doing it is that the Florida Pre-Paid pays the tuition and the Bright Futures pays for room and board, because what should happen is that after pre-paid is applied the left over money from his financial aid acoount will be direct deposited into his or your banking account which then turns around and pays for room and board.

FrmDrters2Knight

bright futures pays for tuition only and cannot be used for room and board
if you have florida prepaid plan and recieve bright futures, if their is a difference in the tuiton amount and what bright futures will pay (if there is one, there may be a surplus) then it will pull from the florida prepaid plan. There is also a florida prepaid dormitory program that is available.