Get Form 5396

What is a FS form 5396? If Series HH bonds are being reissued, the surviving registrant must also complete Direct Deposit Sign- Up Form (FS Form 5396) for direct deposit of the interest payments. The financial institution where the checking or savings account is maintained can assist with completing the form.

Get a certified copy of the death certificate for everyone who has died who is named on any of the bonds. Have each person who is entitled to a distributed bond also fill out and sign the appropriate forms: If they want cash for their bond: FS Form 1522. If it is an EE or I bond and they want to keep it: FS Form 4000.

Normally, the interest you earn on your savings bonds becomes part of your gross income for tax purposes.

Banks and credit unions can redeem savings bonds over the counter.

Use the Education Exclusion With that in mind, you have one option for avoiding taxes on savings bonds: the education exclusion. 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.

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.

If you have cashed paper savings bonds, you will receive a 1099-INT in the mail.

While tax-free bonds make the interest tax free, tax saving bonds give you tax benefits for the investment amount. Remember, in case of tax-saving bonds the interest that is paid is fully taxable in the hands of the investor.