Tax-favored ways to build up a college fund - Crawford Ellenbogen

If you’re a parent with a college-bound child, you may want to save with tax-favored vehicles. For example, if used to finance college, eligible families don’t have to report the interest on Series EE U.S. savings bonds for federal tax purposes until the bonds are cashed in. And interest on “qualified” Series EE (and Series I) bonds may be exempt from federal tax if the bond proceeds are used for qualified education expenses. To qualify for the tax exemption, you must purchase bonds in your name (not the child’s) or with your spouse. The proceeds must be used for tuition, fees, etc. and not room and board. The exemption is phased out if your adjusted gross income exceeds certain amounts.