How do I figure out taxes owed on interest made on mature Savings Bonds?
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Q&A: How do I figure out taxes owed on interest made on mature Savings Bonds?
I have 14 Savings Bonds, all denominations.
The total interest earned is ,313.40.
The total value is ,838.40.
I have to report the interest as income on my taxes next year.
How do I figure out how much I`ll owe once I cash them in?
(I reside in the state of Minnesota, if that figures into the tax equation.)
The answer in the following:
Answer by src50
What you’ll owe depends on your total income, filing status and deductions. The interest just gets added to your other income.
Answer by The Bond Guru
Hi Miss Kitty, I’m the Savings Bond Guru from SavingsBonds.com and I hope I can help answer your question.
I can see you’ve done a great amount of research already on your bonds knowing the amounts of interest and the total value of your US Savings Bonds.
When you cashed your bonds you were probably issued (or will be issued) a 1099-INT for the amount of interest you received from the bonds. This is going to be what is taxable on your tax return (for the year they were cashed).
From there, you’ll need to know what the rest of your income for that year is, wages, dividens, etc… and factor that all into your tax return for the year. This all comes down to the bottom line, income.
I suggest you do a tax analysis with your financial planner or tax accountant with the concequences these bonds will have on your taxable income. You’ll have to find out how much higher of a tax bracket the interest from these bonds puts you in, and then determine what the difference was from the previous bracket when you didnt have the bond interest factored in.
THEN you’ll know how much in interest you are really getting charged from the IRS.
If you would like to be put in touch with a financial planner in your area in MN, I could assist you in that. Please send me a private message or visit our web site www.SavingsBonds.com and we’d be happy to help you.
Good Luck,
the Savings Bond Guru
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