Will cashing in my savings bonds cause me to claim the earnings on my year-end taxes?

Answer 1

Yes, but remember not all of what you will get paid when you cash the bonds in will be interest, some will be principal, which isn't taxable. When you purchase the bonds you purchase them at half the face value (i.e paying $50 for a $100 savings bond). And the interest you get paid is generally not taxable on the state level. Also, if you use the bonds for education purposes the interest can be non-taxable. I have included a link to bonds used for education purposes.

PS, Jimdragontech and snake92 are incorrect about rolling the bonds into an IRA and therefore making the interest non-taxable.

Answer 2

Yes, at the end of the year you'll get a 1099-int for the interest from the bank where you cash them. You'll show the amount as interest on your federal tax return. You don't pay state tax on US savings bonds.

Answer 3

The short of it is yes. its still taxable income-unless you roll them into something like an IRA, but the IRA ot other program must be eligible and if you are within retirement age that may not be possible.
Depending on age, you might be able to put the money into a tax-free college and use them to pay for college-but check it out first before you do

Answer 4

yep its income depending on how much you have is what is the main question if you cashing in a few thousand its no biggie in one sense if your talking tons of money you may want to think about how you can offset this IE stuff it into an IRA or soemthing else thats sheltered.

Answer 5

Yes, unless you have been reporting the interest each prior year, which almost nobody does.

Answer 6

yes