Do you get a 1099 for savings bonds?
If you cash a paper savings bond at a local bank, that bank is responsible for giving you a 1099. If you cash a paper savings bond by mailing it to Treasury Retail Securities Services, we mail you a 1099 by January 31 of the following year.
If a financial institution pays the bond, you get a 1099-INT from that financial institution either soon after you cash your bond or by January 31 of the following year. If your bonds are in your TreasuryDirect account, your 1099-INT is available in your account by January 31 of the following year.
If you invest in TreasuryDirect, your 1099 will be available electronically and you can print the form from your account. 1099 forms are available by January 31 of each tax year.
Any interest earned on a savings account is taxable income. Your bank will send you a 1099-INT form for any interest earned over $10.
The interest on your I bond falls on the same line as other interest income whether you choose to report it every year or all at once at the end of your ownership. Interest the bond earns is reported on a 1099-INT after the bond is cashed or reissued.
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. That includes expenses you pay for yourself, your spouse or a qualified dependent.
The interest on EE bonds isn't taxed as it accrues unless the owner elects to have it taxed annually. If an election is made, all previously accrued but untaxed interest is also reported in the election year. In most cases, this election isn't made so bond holders receive the benefits of tax deferral.
Another thing to note: Savings bonds don't get a step-up in basis at death the way stocks or other investments do. That means you have to pay tax on the full amount of interest due on the bonds as the inheritor.
TreasuryDirect requires Treasury marketable securities be held for 45 days following original issue before they may be transferred. 4-Week Bills bought at original issue in TreasuryDirect may not be transferred at all because the term of the security is less than 45 days.
The Account Statements will be available on the 1st business day of the month no later than 1pm Eastern Time.
How do I report interest if I didn't get a 1099?
You must report all taxable and tax-exempt interest on your federal income tax return, even if you don't receive a Form 1099-INT or Form 1099-OID. You must give the payer of interest income your correct taxpayer identification number; otherwise, you may be subject to a penalty and backup withholding.
Once a Series EE bond reaches its final maturity, it stops earning interest, but there are no penalties associated with holding onto it beyond that point. After the 30-year period, the bond has reached its maximum value and it won't continue to accrue interest.
- Investing in a tax-deferred account such as a traditional individual retirement account or a 401(k).
- Stashing money in a tax-exempt account such as a Roth 401(k) or a Roth IRA.
- Log in to your TreasuryDirect account.
- Click the “Manage Direct” tab.
- Under “Manage My Taxes,” click “Year XXXX”
- Near the top of the “Taxable Transaction(s) Summary” page, click “View your 1099 for tax year XXXX”
If you are waiting until your EE or I bond matures (finishes its life) to take the interest on it, you will not get a 1099-INT for that bond until we actually pay you the interest. If you have a TreasuryDirect account, you must get your 1099-INT yourself from your account.
16. How are savings bonds taxed? Savings bond interest is exempt from state and local income tax. Savings bond interest is subject to federal income tax; however, taxation can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first.
If your total interest isn't more than $1500 for the year, and you're not otherwise required to report interest income on Schedule B, report the savings bond interest with your other interest on the "Interest" line of your tax return. For more information, see the Instructions for Schedule B (Form 1040).
Box 3 reports interest earned on U.S. savings bonds or Treasury notes, bills or bonds. Some of this may be tax-exempt. Box 4 reports any federal tax withheld on your interest income by the payer.
Income from bonds issued by state, city, and local governments (municipal bonds, or munis) is generally free from federal taxes. * You will, however, have to report this income when filing your taxes. Municipal bond income is also usually free from state tax in the state where the bond was issued.
After 30 years, the bond no longer earns interest. The current rate on Series EE bonds is 2.70%. “Better rates are available on CDs or Treasury bonds purchased in the open market, whether short term or out as far as 30 years,” Hackmann said.
Who pays taxes on inherited EE savings bonds?
You report the interest that accumulated on the bond during the bondholder's lifetime on their final tax return. The estate would be responsible for paying any tax due and going forward, you'd owe tax on any interest that continues to accrue on reissued bonds.
Normally, the interest you earn on your savings bonds becomes part of your gross income for tax purposes. Under certain conditions, though, you can avoid taxes on the interest by using it to pay for higher education.
Receiving a Form 1099-S typically indicates proceeds from real estate transactions. In the context of an inheritance, if you received property as part of the inheritance and then sold it, the 1099-S would report the gross proceeds from that sale.
Estates and Trusts
Yes, you may redeem a bond to the estate of the last decedent on a bond. Retain both death certificates and a copy of the letters of appointment for the representative. Redemption requests may also be sent to the Treasury Retail Securities Site at the Federal Reserve Bank of Minneapolis.
The individual owns the U.S. Savings Bond if only his or her name appears on it. The Social Security Number shown on a bond is not proof of ownership. EXAMPLE: A U.S. Savings Bond title reads, “John Smith.” Only John Smith can cash that bond.
