How much in taxes will I owe for savings bonds?
Anne edited the following
Question: How much in taxes will I owe for savings bonds?
I have about , 272 in savings bonds that I am going to cash in. I was just wondering, from this total, how much will I have to pay back in taxes from the amount?
ANSWER:
Answer by the tax lady
It depends on the rest of your income.
If you are a dependent with other income, the first 0 isn’t taxed. The next 0 is taxed at 10% and the last 72 is taxed at your parents rate.
Answer by garyg7
You only pay tax on the interest portion of the bonds. If the cost of them (most paper bonds issued these days have a cost of 1/2 the face value, but the electronic bonds are sold at the face value and interest accrues from there.) is ,000, then you have only ,272 of income. Then it depends on your total income. If you are a dependent with no other income, the first 0 isn’t taxed. The next 0 carries a 10% tax rate and the rest is taxed based on your parents’ income tax rate. (The rate brackets in 2010 are 10%, 15%, 25%, 28%, 33%, and 35% for most people. Some people are taxed based on a system called the alternative minimum tax in which there are two rates 25% and 28%.)
If any of the bonds are less than five years old, then you forfeit the last three months of interest.
I hope this helps.
Gary
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