How to weigh when to sell government savings bonds to maximize return while minimizing taxes?

[kritter-k]

I’m retired and have some paper EE and I savings bonds that won't mature until 2030 but are earning an interest rate higher than what I could currently earn in a CD or high-yield savings account. My spouse died this year, so I will be in a lower tax bracket for my 2025 taxes (12 percent, since I can file married jointly and don't have to take RMDs yet) than I will be in subsequent years when I must file single and take RMDs (22 percent).

If, for the sake of comparing apples to apples, I assume that tax brackets rates will be the same in 2030 as they are now, is there a way to weigh the pros and cons of selling the bonds now while I’m in a lower tax bracket versus holding them to maturity when I'm in a higher tax bracket? Is there a way I could model both scenarios in TurboTax desktop, or is there formula I could use to do the comparison? 

[DianeW777]

Yes, you can use TurboTax to weigh the differences as an estimate by setting up accounts for each scenario in TurboTax Desktop. This version will allow you to create practice returns and you are not trying to file them. You can keep changing the scenario with changes in your income.

Check the interest amount if you cashed in the bonds and then add that interest to the rest of your income on a married filing jointly status and in the other account use the single status to see the differences

2025 Filing jointly or separately (using 2024 software):

There is also a 'What-if Worksheet' you can use in TurboTax Desktop. Select 'Open Form' and type 'what', then click the 'What-if Worksheet. Use the Married Filing Joint versus Married Filing Separate checkbox to see these results however the tax would be higher using this.  This is a quick view in worse case scenario.

Also TurboTax Online can be created for each scenario. You can use a different user name for each online account. 

The tax brackets in 2024 will give a good indicator of your tax situation based on income and filing status. We could assume they will go up by 2030 however working with what we know is the place to start. Also you can see the tax rates for 2025 in the link below.

• State and Local Sales Tax Rates, 2025

We are sorry for your loss.

[Edited: 04/08/2025 | 7:05 AM PST]