U.S. Savings Bonds
Series I savings bonds and Series EE savings bonds purchased after 1989 have a tax-savings college education feature. When you use the bonds to pay for higher education, you may be able to exclude the bond’s interest income from your tax return.
In addition, savings bonds are a great way to support your country while helping your child save for their future education. Savings bonds also make a great gift to give to grandchildren as presents.
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January 10th, 2007 at 9:54 pm
How can I use Savings bonds for college and avoid income tax?
February 22nd, 2007 at 8:21 pm
Stuart - You simply cash a qualifying savings bond, pay for the expenses and then file an IRS form 8815 at tax time to claim the exemption. There are a few restrictions - for those see IRS pub 550.