03-22-2007, 04:30 PM
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#1 |
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Greenhorn
Join Date: Mar 2007
Posts: 1
Rep Power: 0  |
bonds questions about them
ok my wife has a bond due out in aug this year what is the best way to not get screwed by uncle sam when we cash it out i know he gets his part but how much so we can keep it back for tax time i had some several years ago and never clamed them they were like 700 dollars this one is a lot more about 8 grand
 thanks for any info
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03-22-2007, 07:31 PM
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#2 |
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Savings Advisor
Join Date: Aug 2006
Location: Central CT
Age: 32
Posts: 761
Rep Power: 7 |
Assuming this a series EE bond....
Uncle sam gets his cut no matter what you do (legally, anyway). Basically, you go to a bank, and turn it in for its accrued cash value. At the end of the year, you will receive a 1099-div (i believe thats correct... its been a while since i dealt with bonds) which you must report on your taxes as taxable income. So upfront, it costs you nothing. its year-end where you will get hit with the tax on it. How much, really depends on all the other things, namely how much you make, and how much you write off. So, the real way to get around that taxable 'income' is to have something to balance it off in terms of write offs. Home improvements, stuff for work, mortgage interest, what have you. You need to balance off and itemize out to make the extra money break even for you for the most part. |
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