One of the biggest problems facing many parents today is trying to figure out how to pay for their children's education. The rising costs of college education may impose significant burdens on many families; finding ways to finance these expenses may require extensive thought and planning.
In 1988, Congress enacted Internal Revenue Code section 135, which excludes from income the interest from series EE U.S. savings bonds if the proceeds from their redemption are used for specific higher education expenses.
Qualified bonds include those issued after 1989 at a discount to taxpayers who are at least 24 years old before the date of issuance. …