Hello America !
I have a client who makes 140,000 a year and is single. She has US Savings Bonds. She would like to cash the bonds and contribute the principal and interest (tax free) to a 529 plan.
From what I can read it looks like there is a income limitation.
I am directed to form 8815 which has this income limitation of MAGI of 94,500 she is not eligible. My problem is this form is set up as if she is currently paying higher education costs. Which is not true. And based on this form even if she made less than the 94,500 all of the interest on the savings bond would be taxable because no current education expense is being paid.
So I am curious if anyone has any ideas? Is there an income limitation on cash out the US savings bond and rolling the otherwise taxable interest income into a 529 plan tax free?
Redskins vs. Bengals tonight So who has a prediction?
My best,
Art