Taxes for EE savings bonds

Forum|Forum|6 years ago
December 1, 2019
1 reply
4 views

I am a 21 years old full time student with no income in 2019. However, I just cashed in my Series EE savings bonds. The accrued interest on them is $5190. I know, I will get 1099-INT form. What will be my tax rate?

Hal_Al

Level 15

The tax, for 2019, on that will be $464. How you get to that is complicated. I assume that you are still claimed as a dependent by your parents. As a full time student, under 24, you are subject to the “Kiddie Tax”* on “unearned income”. The calculations will be shown on form 8615 of your return (or form 8814 of your parent’s return**).

Form 8615: https://www.irs.gov/pub/irs-pdf/f8615.pdf

*The "Kiddie Tax" is a way pf preventing parents from shifting investment income to their children to avoid tax. It was revised as part of the 2018 tax law to tax a child's income at trust tax rates.

**Since that is your only income, your parents have the option of reporting it on their return and you do not even need to file a tax return.