US Savings Bonds

Posts Tagged ‘us savings bonds education’

Question: When you buy a United States Savings Bond, you…?

A. loan money to the government
B. borrow money from a savings and loan association
C. donate money for special government projects
D. pay for your child’s education

2. What was one reason the U.S. government started a Federal reserve system?
A. to keep the banking power of the US spread out among various districts
B. to make sure that US banks were obeying laws regarding banking
C. to have a place for banks to deposit their excess deposits
D. to provide consumers with access to funds for business expansion

Answer: aB

HEALTHCARE REFORM US Senator, Blanch Lincoln, Barbara Boxer, Chris Dodd, Ted Kaufman

Question: Cashed Savings Bonds taxed as income if I used it for tuition?

In May 2006 I cashed in about $950 worth of Savings Bonds some family gave me when I was young (27-30 years ago).

I took this money and put it in my checking account and immediately used the proceeds (and then some…) to pay off my outstanding college tuition bill.

Do I need to pay income taxes on this amount? Because the bank sent me an income statement for the $950 and the school has sent me nothing. I know that higher education tuition is normally tax deductible for an unlimited number of years, which is different than when I first started college.

Thanks!

Answer: You will have to pay the interest on the Savings Bonds because you can not exclude them for FEDERAL taxes because you were under 24 when they were issued to you. However, you can write off some of the school expenses (tuition and fees) with either a Hope Credit, Lifetime Learning Credit, or Tuition and Fees Deduction.

You should not report the bond interest on your state tax return.

DISCOVERY EDUCATION AND 3M ANNOUNCE NATIONAL SCIENCE WINNER