US Savings Bonds

Archive for January, 2010

Question: Reporting Interest from cashed Savings Bonds?

I cashed in 25 Savings Bonds in 2006 and I got a receipt for them that has 3 sections.

Section 1=Customer Information
Section 2=Savings Bonds- a list of all the bonds and their values

Section 3=TIN Certification and Customer Acknowledgment of Receipt- it states the following…

“I understand that the Total Interest will be reported to the International Revenue Service for this taxable year and I acknowledge receipt of the Total Value shown above.

Under penalty or perjury, I certify that the number shown above is my correct Taxpayer Identification Number and that I am not subject to backup withholding for interest payments made to me or credited to my account”

Which I then signed and dated.

Below that it says “Please retain a copy of this form for your records. This form is not a Form 1099 INT”

My question is am I supposed to receive a 1099 INT for this interest, if not, how do I report it?

I live in Minnesota if thats important.

Answer: When I’ve cashed in bonds, I have received a 1099-INT from the bank. The bank should have mailed those by January 31 for bonds cashed during 2006, so you should already have it. (If you have other accounts at that same bank, I think the savings bond interest is in a separate box on the same 1099-INT as your regular bank account interest.)

It is definitely reportable on your income tax form, however, there are some cases where the interest is not taxable. For example, for certain Savings Bonds, if you use the money to pay college expenses.

Bond Investing : How Much Is My Savings Bond Worth?

Question: Question about EE Savings Bonds, “personal trusts”….?

My nana (who is now deceased) bought me a bunch of Savings Bonds (EE) for college – but in my mom’s name. My mother doesn’t want to deal with anything that isn’t for her, so we are wanting to transfer ownership of the bonds.

I went on the treasury website and found this form:

http://www.treasurydirect.gov/forms/sav1851.pdf

Is that the form that we need? I don’t know exactly what a “personal trust” is, am I a “personal trust”? When it says “trust” and “trustee”, is it referring to the same thing?

I’m awfully confused as I know nothing about this.

Any help anyone can offer me??
I’d reaaaally appreciate it.

Thanks!!

Answer: If you can live with less money, and depending on the age of the EE bonds, why not just redeem them and take the reduced proceeds and set up your own 529 Education plan???

You could defer taxes and income that way, AND set up a way to pay for your education too…

Authors@Google: Joseph Stiglitz

Question: could you please explain what kind of Savings Bonds there are in the united states?

im a teen, and im looking into buying some Savings Bonds with some of my savings for when im older

im looking for one with a high interest rate
information on any kind of savings bond, actually, would be good

also, do u have any bad experiences with Savings Bonds?
do you recommend them?

thank you!!!

Answer: Savings Bonds are issued by the U.S. government. They are the safest type of bond, so they pay the lowest interest because they have the least amount of risk (the more risk, the higher the interest rate).

There are EE bonds. You buy them at 50% of the face amount ($25 for a $50 bond), then wait for many, many years (up to 30 years) for them to mature to full face value. This is why they are good gifts for babies from their grandparents. The babies can afford to wait for maturity of the bonds.

The best thing about Savings Bonds is that you are guaranteed the money will be there at maturity. The downside is that people often forget they have them, and they sit in drawers or shoeboxes or safety deposit boxes until past maturity and you lose the interest after the maturity date.

If you’re a teen, you’re probably going to need the money before the bonds mature. Try a bank savings account, or a bank money market account. Good luck!

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