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Submitted By: someone
Answered: February 24, 2017 8:00 am
Answered: February 24, 2017 8:00 am
I have series EE bonds that have reached final maturity and have stopped earning interest. If I don’t cash them in now, can I defer the tax on this interest?
No. A taxpayer who has not reported interest annually but opted to defer it must take all of the accrued interest into income on the earlier of these events:
- When the bonds are cashed in
- When you give up ownership (e.g., transfer them)
- When the bonds stop earning interest because they reached final maturity
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Tax Glossary
Withholding
An amount taken from income as a prepayment of an individual’s tax liability for the year. In the case of wages, the employer withholds part of every wage payment. Backup withholding from dividend or interest income is required if you do not provide the payer with a correct taxpayer identification number. Withholding on pensions and IRAs is automatic unless you elect to waive withholding.
