Many parents and grandparents purchase education savings bonds– series EE or series I bonds– to pay for college. These bonds are tax-free within some limits, and it’s not uncommon for families to find out too late that they’ve landed outside the limits.

Here is how these bonds work: You purchase the bond at face value, with a minimum purchase of $25 and a maximum of $10,000 (with some variations to that). That means a $25 bond costs $25. The bonds earn interest which is compounded semiannually for up to 30 years. The interest is accrued, i.e., not paid out, until you cash in the bond, though it is taxable unless the bond is used for qualified higher education expenses. EE bonds earn a fixed interest rate (currently 0.10%). I bonds have a combination of fixed interest rate and inflation adjustment. You can pay taxes on the interest annually, or if you fall within the income limits (AGI of $93,150 for single filers in 2017, $147,250 for married filing joint), defer the taxes. Like distributions from a 529 plan, as long as the bond is redeemed to pay for qualified higher education expenses, the interest is not taxable.

Here’s the catch: As soon as your income exceeds the thresholds, the interest earned by the bonds is taxable to you. Not only that, but the interest is reported as income on your tax return which, if this occurs in a FAFSA year, will raise your EFC. It’s not at all unusual for a family to purchase these bonds for a baby and then discover once they reach their teen years that their household income has grown beyond the threshold and suddenly the bond interest is taxable. And once you report the interest annually, you have to keep reporting it annually, so even a one-time bump in income will throw the savings bond strategy off.

Fortunately, there’s a remedy: You can roll the bonds into a 529 account. Keep in mind, though, that the same income limits apply to rollovers. So if your income is on an upward trajectory, making that change sooner rather than later is imperative. There are some specific steps to follow to ensure that the rollover is qualified (not taxable), so you’ll want to contact your 529 plan for detailed instructions. And of course consult your tax advisor.

Treasury Direct, the Treasury’s website, has additional information about series EE and I bonds, tax treatment and other requirements.

While I’m on this topic, most college savings vehicles other than 529s have some form of income cap. Coverdell ESA accounts have income limits for contributions, for example. Families beginning to save for college should take a long view when thinking about how to start saving in order to avoid unexpected taxes or penalties or find themselves in need of a new college savings plan.