How Report Savings Bonds Renewed Late - Are 4 amended returns required?

[nerdindenial]

On January 3, 2024 I discovered some paper series EE US savings bonds my joint spouse owns that matured in 2019, 2020. 2021, 2022, and 2023. I want to cash them in at a bank, but everything I Google seems to say that I need to file an amended return (TurboTax may work) for each of those years - which seems like a huge effort over a little $1K in interest income.  I've never filed amended returns, but should I do that or just wait for the IRS to send me bills with interest and penalties due? Please recommend the best path forward.

[tagteam]

See https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds

The interest is generally deferred until redemption (holders can make an election for the interest to be taxed each year, however).

[nerdindenial]

@tagteam Thanks but your reply doesn't specifically cover the case I asked about (holding the bonds years after their maturation date).

Here is an article that says that I need to file amended returns for 2019-2022 and possibly 2023:

https://fergusonfinancialinc.com/financial-planning/us-savings-bond-tax-trap/

The article does not say if there is any other good ways to proceed other than going through all that work.

[tagteam]

I believe that to be the case; if you held past the year the bonds matured you would need to amend.

Note that, from your original post, you have one year (2019) for which a timely return would have been filed in 2020 and the limitations period (again, for a timely filed return) would have expired in 2023. Also, the limitations period for the 2020 tax year will expire in just a few months (April, 2024) assuming you filed a timely return (in April of 2021). Just a note and not to say you shouldn't amend those returns. 

[nerdindenial]

I cashed the bonds yesterday at a bank and they said that only the Treasury would send me a 1099, the bank would not. So now I guess I'll wait until April and see if I get any 1099s and for what year(s). Maybe we can leave this question open until then and I'll fill in the final resolution (and any workarounds to amended returns) then...

[VolvoGirl]

What bank?  The 1099 will be for 2023 2024 since that's when you cashed them.  If you get a 1099 it won't come until NEXT year Jan 2025.  You might not get a 1099INT at all.  I cashed in a lot of bonds in 2022. I got receipts from Wells Fargo. I wasn't expecting to get an actual 1099INT from WF but I did!  If you didn't get a 1099 INT you just enter the total interest like a 1099 INT and put the amount in box 3.  The interest is taxable for federal but usually not for state.

[VolvoGirl]

I edited by post above because you said you cashed them yesterday  Jan 4, 2024?  Oh and if you cashed in a lot you may want to pay a 2024 estimated tax payment to cover the tax.  

[nerdindenial]

@VolvoGirl @tagteam I cashed 19 bonds in (5 different years of maturity, all late) yesterday, 1/4/2024 and received $2,946.60 federally taxable interest income and an itemized (for each EE paper bond) receipt for same from Navy Federal Credit Union. So I know exactly the interest income for what Federal tax was due in 2019, 2020, 2021, 2022, & 2023. And of course penalties and interest will be due too (at least for 2019-2022). So the question is which of the following I should I do now:
1. Start filing amended returns for 2019-2022? I have no idea how much work this is, but they are all in TurboTax Home and Business.

2. Report the 2023 maturity bond income on the 2023 return, even though I don't have a 1099 and the profit was realized in 2024?

3. Pay the 2019-2022 tax as a Q1 2024 estimate? Seems like this could create some messy accounting and explanation issues if I end up filing any amended returns. It also doesn't handle the penalties and interest.
Looking at this list, maybe doing items 1 & 2 would solve the whole problem cleanly?

[tagteam]

Don't make a payment for the (proposed) amended returns as a Q1 2024 estimate. Rather, you can make a payment for amended returns using the IRS web site at the link below.

https://www.irs.gov/payments

Also, is the $2,946.60 the total amount of interest for all of the bonds you redeemed? If so, what is the amount for each tax year? 

[nerdindenial]

@tagteam  I see at https://sa.www4.irs.gov/ola/payment_options/make_payment that I could make a payment for an amended return for 2019-2022, but those amended returns don't exist yet. So it seems to me that if I am really going to file amended returns I should just go ahead and do it and let TurboTax calculate the penalties and interest due for each year and pay everything when I submit the amended returns? If so, the question for me is "how long does it take to file an amended federal return with TurboTax?"

$2,946.60 is the total interest income. I can total up the amount of interest income for each year from this spreadsheet, which is from https://treasurydirect.gov/BC/SBCPrice and matches the NFCU receipt to the penny:

Serial #	Series	Denom	Issue	Next	Final	Issue	Interest
Date	Accrual	Maturity	Price
NA	EE	$100	Mar-93		Mar-23	$50.00	$114.12
NA	EE	$100	Feb-93		Feb-23	$50.00	$157.36
NA	EE	$100	Jan-93		Jan-23	$50.00	$157.36
NA	EE	$100	Dec-92		Dec-22	$50.00	$157.36
NA	EE	$100	Nov-92		Nov-22	$50.00	$157.36
NA	EE	$100	Oct-92		Oct-22	$50.00	$157.36
NA	EE	$100	Oct-92		Oct-22	$50.00	$157.36
NA	EE	$100	Sep-92		Sep-22	$50.00	$157.36
NA	EE	$100	Aug-92		Aug-22	$50.00	$157.36
NA	EE	$100	Jul-92		Jul-22	$50.00	$157.36
NA	EE	$100	Jun-92		Jun-22	$50.00	$157.36
NA	EE	$100	May-92		May-22	$50.00	$157.36
NA	EE	$100	Feb-92		Feb-22	$50.00	$157.36
NA	EE	$100	Oct-91		Oct-21	$50.00	$157.36
NA	EE	$100	Jun-91		Jun-21	$50.00	$157.36
NA	EE	$100	Feb-91		Feb-21	$50.00	$157.36
NA	EE	$100	Sep-90		Sep-20	$50.00	$157.36
NA	EE	$100	May-90		May-20	$50.00	$157.36
NA	EE	$100	Dec-89		Dec-19	$50.00	$157.36
							$2,946.60

[VolvoGirl]

Turbo Tax won't figure the interest and penalties.   Let the IRS bill you for those.  You have to print and mail amended returns.  Mail each one in a separate envelope.  It will take the IRS a long time to process them, like 6 months or more.

You may have trouble amending 2019.  Turbo Tax only supports the last 3 years and stopped 2019.  Do you still have it installed?   You won't be able to reinstall 2019 now or update it.  

To amend in Windows,

You start by just opening your return as usual. Go up to File-Open.  You need to have the .tax2019, etc. file on your computer.  

Also you first need to check the filing status inside the program so it knows it was filed and accepted.  Open your return and go up to the top black menu bar first item

File > Electronic Filing > Check Electronic Filing Status

Then save your return and close it.  Close the program and reopen it.  

If you don't see a button for Need to Amend a Filed Return? on your home screen then you can get to it here. Go to:
Federal Taxes -or- Personal (for H&B)
Other Tax Situations
last section, Other Tax Forms
Amend A Return - Click the Start or Update button

[tagteam · Accepted solution]

It is most likely better if you let the IRS calculate any interest and penalties due while remitting the additional tax due with the amended returns. 

Note that it can take up to 20 weeks to process amended returns.

See https://www.irs.gov/filing/wheres-my-amended-return

Further, you will have to print and mail the returns for those tax years.

You might also want to consider your other income as reported for at least the 2019 tax year as that tax year is now closed and it appears as if the total unreported interest is $157.36.

[nerdindenial]

Thanks - very helpful advice from volvogirl and tagteam.

I have all TurboTax versions installed.
I seem to recall googling that I may be able to do most or all of these amended returns electronically with TurboTax now, but I guess I will find out!

[tagteam]

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@nerdindenial wrote:

....I may be able to do most or all of these amended returns electronically with TurboTax....

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You can't. As VolvoGirl indicated you will have to print and mail the returns.

[nerdindenial]

Sorry I don't know what this means and what it requires me to do differently: "You might also want to consider your other income as reported for at least the 2019 tax year as that tax year is now closed"