Do I have to report savings bonds on my taxes? (2024)

Do I have to report savings bonds on my taxes?

Savings bond interest is subject to federal income tax; however, taxation can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. You also have the option of claiming interest annually for federal income tax purposes.

Will I get a 1099 for cashing in savings bonds?

At a bank: If a bank cashes your savings bond, they are responsible for getting you a 1099-INT. They may give or mail you the 1099-INT as soon as you cash the bond or they may wait until the following January.

How do I report a savings bond on my tax return?

If your total interest isn't more than $1500 for the year, and you're not otherwise required to report interest income on Schedule B, report the savings bond interest with your other interest on the "Interest" line of your tax return. For more information, see the Instructions for Schedule B (Form 1040).

How much tax will I pay on my EE savings bonds?

The interest on EE bonds isn't taxed as it accrues unless the owner elects to have it taxed annually. If an election is made, all previously accrued but untaxed interest is also reported in the election year. In most cases, this election isn't made so bond holders receive the benefits of tax deferral.

Will I receive a 1099 from TreasuryDirect?

If you invest in TreasuryDirect, your 1099 will be available electronically and you can print the form from your account. 1099 forms are available by January 31 of each tax year.

How do I cash a savings bond without paying taxes?

You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.

Is there a penalty for not cashing in matured EE savings bonds?

While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.

Do I pay taxes on EE savings bonds?

Key Takeaways. Interest from EE U.S. savings bonds is taxed at the federal level but not at the state or local levels for income. The interest that savings bonds earn is the amount that a bond can be redeemed for above its face value or original purchase price.

Do you have to pay taxes on matured savings bonds?

They are still taxable. The interest income of the savings bond will be taxed to the bond's owner—i.e., the recipient of the gift—when the bond matures and is redeemed for cash (or the owner will be taxed each year if they elect to report the interest income annually).

Which bonds are tax-exempt?

Municipal Bonds

Most bonds issued by government agencies are tax-exempt. This means interest on these bonds are excluded from gross income for federal tax purposes.

What happens if you don't report interest income?

If you receive a Form 1099-INT and do not report the interest on your tax return, the IRS will likely send you a CP2000, Underreported Income notice. This IRS notice will propose additional tax, penalties and interest on your interest payments and any other unreported income.

What happens to EE bonds after 30 years?

Series EE and Series I bonds no longer earn interest when they reach maturity 30 years from the date of issuance. If you have any bonds older than 30 years, we recommend cashing them in immediately because they are no longer earning interest.

What interest income is not taxable?

In some cases, the amount of tax-exempt interest a taxpayer earns can limit the taxpayer's qualification for certain other tax breaks. The most common sources of tax-exempt interest come from municipal bonds or income-producing assets inside of Roth retirement accounts.

Do you get a 1099 for EE bonds?

If a financial institution pays the bond, you get a 1099-INT from that financial institution either soon after you cash your bond or by January 31 of the following year. If your bonds are in your TreasuryDirect account, your 1099-INT is available in your account by January 31 of the following year.

Who pays taxes on inherited savings bonds?

If the executor doesn't include predeath interest on the decedent's final return, then the beneficiary owes federal income tax on all pre- and post-death interest on the earlier of the bond's maturity or redemption.

How do I report a savings bond on Turbotax?

You'll have to make up a 1099 form for the tax software. Use the Savings Bond Calculator to calculate the change in redemption value for each bond from the prior December to last December. Track each bond in a spreadsheet. Report the total change as your interest for the year in Box 3 of the made-up 1099-INT.

What documents do I need to cash a savings bond?

If you're cashing in a paper savings bond of $1,000 or less, you'll need FS Form 1522 and a copy of your driver's license, passport, state ID or military ID. If the bond amount is more than $1,000, you must have your signature certified by a notary or certifying officer.

Can a bank refuse to cash a savings bond?

Financial institutions now have the option to not cash savings bonds for both non-customers or new customers. Our Secret Service partners recommend that a customer be established for 12 months before cashing bonds at a financial institution.

What is the easiest way to cash savings bonds?

Where do I cash in a savings bond? You can cash paper bonds at a bank or through the U.S. Department of the Treasury's TreasuryDirect website. Not all banks offer the service, and many only provide it if you are an account holder, according to a NerdWallet analysis of the 20 largest U.S. banks.

What happens to savings bonds that are never cashed?

For those fully matured bonds remaining unredeemed, there is no active program by the Bureau to locate the bondholders and pay them the proceeds to which they are entitled. Traditionally, it has been up to the registered owner to remember to redeem the matured bond decades after the initial purchase.

When should you cash out EE savings bonds?

You can cash in (redeem) your EE bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.

How long does it take for a $100 savings bond to mature?

They're available to be cashed in after a single year, though there's a penalty for cashing them in within the first five years. Otherwise, you can keep savings bonds until they fully mature, which is generally 30 years.

Does it matter whose Social Security number is on a savings bond?

Use of the purchaser's SSN does not confer rights to the bond or require interest reporting. Bonds ordered using this form may only be issued in the names of individuals (adults or minors) in single ownership, coownership, or beneficiary forms of registration.

How do I cash in mature EE bonds?

You may be able to cash in paper EE bonds at a bank where you have an account or through TreasuryDirect. Ask your bank about its process for cashing savings bonds. Ask your bank how much it will cash at one time. Determine the identification or other documents you will need.

Should I cash out matured savings bonds?

It is relatively simple to cash in savings bonds that have matured and are no longer earning interest. If you need access to cash, even bonds that haven't reached maturity may be worth turning in. If you are struggling with debt, cashing in a bond is a good way to pay it off, even if the bond is cashed in early.