According to IRS Publication 550 [see above]...
...the correct way to report interest earned on US Savings Bonds, if you have elected to
defer interest reporting, is to report them in either the year they are cashed OR the
year they reach final maturity - WHICH EVER OCCURS FIRST. According to conversations
with IRS representatives, you MAY be penalized on the interest earned if you do not properly
report savings bond interest income earned by your savings bonds on your federal income tax
return for the same year.
How does this affect my investment?
Owners of US Savings Bonds now need to be more diligent with the tracking of their bonds to ensure the best possible return while avoiding the loss of interest.
It is important to know when your bonds will reach final maturity so you can properly report savings bond interest income earned by your savings bonds on your federal income tax return for the same year.
How can you stay up-to-date on final maturity...
...and other important savings bond facts including total interest earned, when interest will be posted
and the current % rate your bond is earning? The Bond Guru is currently helping thousands of people
track and manage their savings bonds online. Read more and sign up for our FREE TRIAL of
the service to determine your current cash in value, avoiding penalties or forfeiture of interest, cashing in the wrong bond at the wrong time and other common pitfalls of savings bond owners.
What to do with Matured Bonds?
The government has proposed the following steps for individuals with matured bonds, who's interest has not yet been reported:
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- Bond interest should be reported in the year it reached final maturity
- You may amend interest earnings in the year the bond reached final maturity to avoid being penalized
- There is a 3 year statute of limitations on amendments to Federal Tax Returns permitted by the IRS
- If the bond matured more than 3 years ago, you must report the interest earned in the year the bond is cashed-in
- FOR MORE DETAILS READ PUBLICATION 550 HERE see Page 7 for more info.
We'll be bonding again soon.
John J. Quinn - CEO SavingsBonds.com
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NOTE: THE ABOVE INFORMATION ADDRESSES THE SPECIFIC ISSUES CONCERNING US SAVINGS BONDS. THE TAX INFORMATION ABOVE AND ANY TAX-RELATED INFORMATION PROVIDED BY UIS INC. / SAVINGSBONDS.COM IS
NOT INTENDED AS AND SHOULD NOT BE CONSTRUED AS LEGAL, TAX, OR INVESTMENT ADVICE. YOU SHOULD ALWAYS CONSULT
YOUR TAX ADVISOR TO HELP ANSWER SPECIFIC QUESTIONS REGARDING HOW TAX LAWS APPLY TO YOU.
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OUTCOME AS A RESULT OF THE USE OF THIS INFORMATION. FOR SPECIFIC INFORMATION REGARDING U.S. TAX
REQUIREMENTS, PLEASE VISIT THE IRS WEBSITE LOCATED AT HTTP://WWW.IRS.GOV.
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