Get Form 8818 (Rev. September 1999), (Fill-in ... - Uncle Fed's Tax*Board

Yes, I bonds are subject to taxation. But they provide certain tax benefits that distinguish them from other investments and can result in lower tax payments. The original amount you invested in the bond isn't taxed, but the interest earned is.

You can hold your bond once it reaches maturity, but you won't earn any additional interest. On one hand, you can't spend a savings bond without redeeming it, so the value of your bonds would be considered "safe" from that standpoint. What to Do When Your Savings Bond Reaches Maturity The Motley Fool https://.fool.com › how-to-invest › bonds › savin... The Motley Fool https://.fool.com › how-to-invest › bonds › savin...

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. How to Avoid Paying Taxes on a Savings Bond | SmartAsset smartasset.com https://smartasset.com › taxes › how-can-i-avoid-paying-... smartasset.com https://smartasset.com › taxes › how-can-i-avoid-paying-...

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. How to cash In savings bonds | It's easier than you think Citizens Bank https://.citizensbank.com › learning › how-to-cas... Citizens Bank https://.citizensbank.com › learning › how-to-cas...

There is no penalty if you simply hold onto the bond after five years. There is value in holding onto most bonds. The longer they mature, the more interest bonds earn. Time to Cash in Your U.S. Savings Bonds? - Investopedia Investopedia https://.investopedia.com › Bonds › Fixed Income Investopedia https://.investopedia.com › Bonds › Fixed Income

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.

Use Form 8818 to keep a record of the post-1989 series EE and I bonds you cash. You will need the information on this form to complete Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989.

The Education Tax Exclusion The IRS lets you avoid paying taxes on interest earned by Series EE and Series I savings bonds when you redeem them if you use the money toward qualified higher education costs for yourself, your spouse, or any of your dependents.