HiDoes anyone know if I'm supposed to report and claim as income any interest that accrues on my I Bonds each year or if I just pay tax on it when I sell them?And if I'm suppose to claim the interest each year, how does one know how much to claim since I don't get any kind of 1099-INT for them?Thanks,RB
Does anyone know if I'm supposed to report and claim as income any interest that accrues on my I Bonds each year or if I just pay tax on it when I sell them?You actually can make that choice yourself - but once you make the choice you have to stick with it. And you must do the same for all bonds. Generally it is better to wait, but that may not be the case in certain circumstances such as if you expect to be in a much higher tax bracket in later years.Here is a link to Publication 550, the section on Savings Bonds:http://www.irs.gov/publications/p550/ch01.html#d0e1491Publication 17 is also a great all-purpose reference. It has a section on Savings Bonds too:http://www.irs.gov/publications/p17/index.html
Thanks DeltaOne81.Very helpful.RB
You might be in a lower tax bracket in your retirement, then when you sell it is less of an impact.George
You are generally better off to only pay the interest when you sell the bonds. Also in many cases if you redeem your Ibonds and use the funds to pay for tuition expenses for yourself (generally not kids) the interest is not taxed at all.
You only pay interest when you sell them.
There isnt any tax due until you sell them.Your CPA can answer the tax question.
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