Re: Balto. Sun article 11/22, do not understand paying Fedral taxes on year savings bond mature even if they are not cashed, how does that take place. Thank you.
Terry Says: The point is that the taxes are due in the year the bonds reach FINAL maturity! (That’s assuming you did not pay income taxes on the interest gained every year along the way.) So there’s no point in keeping the bonds and delaying cashing them in. When you eventually DO cash them in you could be liable for a penalty if you did not report the interest income in the year the bonds matured! I know this is a surprise to many people. And no, they are not going to come after you because they know that many people received bonds as gifts. But they also know the final maturity date of bonds when you eventually cash them. And that’s how they get you for the penalty!!