Saving for college education with US Treasury Bonds

US Treasurey Bonds such as EE and I savings bonds are a great way for you to start saving for college. These bonds are guranteed by the US Government and IRS allows tax deducations if they are applied towards the education.

What are the requirements? If you have purchased a U.S. savings bond which is series EE bond issued after 1989 or a series I bond, you may qualify for a tax break. The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners). The bond owner must be at least 24 years old before the bond's issue date. Below is the list of the requirements to enjoy this tax break: 1. You must pay qualified education expenses for yourself, your spouse, or a dependent for whom you claim an exemption on your return. 2. Your modified adjusted gross income (MAGI) is less than $78,100 ($124,700 if filing a joint return). 3. Your filing status is not married filing separately.

What are the other requirements? This tax benefit is available only after you have used all of your other qualified education expense resources: 1. Tax-free part of scholarships and fellowships 2. Expenses used to figure the tax-free portion of distributions from a Coverdell ESA 3. Expenses used to figure the tax-free portion of distributions from a QTP 4. Any tax-free payments received as educational assistance, from an organization or employer sponsored programs. This doesn't include inheritance or family gifts. You must be attending an institution which is eligible to participate in a student aid program administered by the Department of Education. This may include public, private or out of country institutions.

Where can I learn more? You can learn more by going to the IRS website.

Where can I buy the treasury bonds? You can buy treasury bonds by going to TreasuryDirect.gov, a government operated website.