Unlike a share of stock or interest in real estate, the money you earn on savings bonds counts as regular income, not capital gains. The interest becomes part of your gross income, taxed at your regular tax rate.
How do I report EE savings bond interest on taxes?
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).
Is interest on series EE bonds taxable?
Interest from EE U.S. savings bonds is taxed at the federal level but not at the state or local levels for income. The interest that savings bonds earn is the amount that a bond can be redeemed for above its face value or original purchase price.
Is there a secondary market for EE bonds?
But unlike most other Treasuries, savings bonds cannot be bought and sold in the secondary market. Series EE Savings Bonds issued after May 2005 earn a fixed rate of interest. Both types of bonds are exempt from all state and local income taxes.
How do I avoid taxes on EE savings bonds?
Use the Education Exclusion 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.
What is the current interest rate on EE savings bonds?
| Current rate: | 0.10% for bonds issued May 2021 – October 2021 |
|---|---|
| Guarantee: | Bonds we sell now will double in value if kept for 20 years |
| Minimum purchase: | $25 |
| Maximum purchase (per calendar year): | $10,000 |
| Denominations: | $25 and above, in penny increments |
What will my EE savings bond be worth at maturity?
As long as you cash in your bond at the maturity date, you can guarantee your investment will be double. So, if you buy a Series EE bond today for $25, and hold it for 20 years, you can cash it in for $50.
