A financial investment in EE Savings Bonds can be a great idea for your future. Prior to you purchasing them you should check about the tax rules, and who may own them. You must reside in the United States, if you do not live in the United States you have to a citizen and have a U.S. Address on record, regardless of where you reside you can own them if you are a civilian employee, and minors are allowed to own them.
These can be a good investment for your child so they can have some money towards their college fund or a vehicle when they turn of age. The interest on EE Savings Bonds are reported the year of redemption on your federal tax return. You may also elect to have the interest reported yearly, once you do this you must do this every year and it applies to all of your securities that are accrual-type securities.
According to the IRS Publication 550, if the EE Savings Bonds comes to its final maturity, interest on the bond that is earned must be reported the year of final maturity. You should amend the Federal Tax Return if possible, within the three years limit for amendments, and report the interest. If this is not possible to do, you should cash the bond in and report the interest on your return for the year you cashed it in. You can research more on the internet about savings bonds interest. Interest that is earned is exempt from local and state taxes on EE Savings Bonds.