If your total taxable interest for the year is more than $1500, you report (and separately identify) the interest on Schedule B of Form 1040 (PDF) or Schedule 1 of Form 1040A (PDF). If your total interest is not more than $1500 for the year, report the savings bond interest with your other interest on the "Interest" line of your tax return. If you do not report the increase in the redemption value of the bonds as interest each year, you must report all of the interest in the year they are cashed or otherwise disposed of. Exception: Some or all of the interest may be excludable from your gross income if you pay qualified higher education expenses for yourself, your spouse, or your dependent during the year.