Can I use my savings bonds for college?
by admin ~ April 28th, 2006 . Filed under: Personal Finance .
JAKE T asked:
I have about 15,000 dollars worth of savings bonds and am pretty sure some are coming due (bought when i was an infant) I would like to use them for college but do not understand if i have to pay tax’s on them because they are in my name and not in my parents. I am also listed as a dependent, so i just don’t understand…
Kelsey Hoxworth
I have about 15,000 dollars worth of savings bonds and am pretty sure some are coming due (bought when i was an infant) I would like to use them for college but do not understand if i have to pay tax’s on them because they are in my name and not in my parents. I am also listed as a dependent, so i just don’t understand…
Kelsey Hoxworth
May 1st, 2006 at 1:00 am
If you are 18 or older enjoy (maybe be 21 in your state).
Open an account in the bank, and just tell them you would like to deposit these (if they are matured).
Not sure if you have to be pay taxes on the profits (I do not believe you do). But, believe me, you will never be in a lower tax bracket.
Just take them to the bank, and ask to open an account. They’ll tell you what you can do or not do.
I hope your parents are aware that you are about to blow $15,000. Once your friends find out (because you will tell them), that money wont last 6 months.
May 4th, 2006 at 4:08 am
A savings bond is simply a method of saving money.
Say 20 years ago, your parents (or grandparents) bought you a bond that has a $50 face value. They paid $25 and the current value of the bond is $37.40. That means, it has earned $12.40 of interest.
If you cash that bond in now, you get the $37.40 and a 1099-INT at the end of the year showing you have $12.40 of interest income. Since the bonds were in your name, this is your income and it’s NOT EXCLUDABLE. If you have no other income and the total is less than $850, it won’t cause you to owe tax.
If you have wages as well, you may have to start paying income tax when the interest total is $300 or more.
PS, savings bonds don’t mature for 30 years.