Question: What are the tax consequences of savings bonds redeemed if income is less than $25,000?

Answer: The general rule, says Tim Wyman, a certified financial planner with the Center for Financial Planning, is that interest from savings bonds (Series EE/E) is subject to federal tax but not state or local taxes when redeemed.

There is an exception to taxation when the bond owner pays qualified higher education expenses at an eligible institution in the year of redemption.

For more detailed information, consider visiting Treasury Direct. Wyman also recommends Treasury Direct for more information on the education exception.

Got questions about the new tax law, Social Security, Medicare, retirement, investments, or money in general? Want to be considered for a Money Makeover? Email Robert.Powell@TheStreet.com. Kim McSheridan assisted with this report.

Question: What are the tax consequences of savings bonds redeemed if income is less than $25,000?

Answer: The general rule, says Tim Wyman, a certified financial planner with the Center for Financial Planning, is that interest from savings bonds (Series EE/E) is subject to federal tax but not state or local taxes when redeemed.

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