I have series EE savings bonds that mature in 5 years. I would like to pay all of the taxes due on the accumulated interest so far. I am told that I can do this, but need to after this year pay the rest of the interest annually until they mature (or are cashed out.) Is this correct?
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Yes, that is correct.
However, just be aware that when you cash them, it is likely the IRS will send you a notice because they will see that you did not report the FULL amount in the year of the sale (it is unlikely they will look back to the previous years to check that). So you will need to respond to the IRS notice showing them that you reported the income in previous years.
Yes, that is correct.
However, just be aware that when you cash them, it is likely the IRS will send you a notice because they will see that you did not report the FULL amount in the year of the sale (it is unlikely they will look back to the previous years to check that). So you will need to respond to the IRS notice showing them that you reported the income in previous years.
@ rskoss wrote:
TurboTax 2018 doesn't seem to allow the reporting of previously paid interest. When I try to enter the amount, TT tells me that the interest can not be previously reported because it's regular interest. This makes no sense.
It's been a while since your post, but I'll leave this for anyone else who stumbles onto this old thread.
Savings Bond interest is entered in Box 3 of the 1099-INT. It sounds like you entered it in Box 1. When correctly entered in Box 3, then the amount can be adjusted, if necessary, on a subsequent screen.
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