HH Bonds
I inherited many E and EE Bonds quite a while ago, with large dollar amounts. I converted many of them into HH Bonds in my name & my daughter’s name, who is my executor. 1. How can I find out which HH Bonds had the interest on them paid already? 2. Is there any way to cash them without going into a real high tax bracket? What can I do? Thank you in advance for your response.
Terry Says
All HH bonds reached final maturity on August 1, 2024 — and should be cashed in. They have all had the interest paid out. Read this: https://www.treasurydirect.gov/savings-bonds/cashing-a-bond/hh-savings-bonds/
Those bonds may be paper or held electronically. YOu’ll need this form to cash them in:
https://www.treasurydirect.gov/forms/sav1522.pdf The money is sent directly to the linked bank account in your TreasuryDirect account.
HH bonds are sold for their face value — but there may be deferred income taxes built up from before the conversion from EE to HH.
You — or your estate — will pay income taxes when they are cashed in. YOu’ll receive a 1099 INT in January of the year after you redeem the bonds. And yes, if you have a significant amount of bonds, then it could push you into a higher tax bracket. AND, if you have enough additional income, it could increase the premiums you pay for Medicare Part B and D!
You might want to stagger cashing them in, although strictly speaking the taxes are due the year the bonds mature. The Treasury website states: “As all HH bonds have reached final maturity, any deferred interest shown on the face of the bonds will be reportable at the end of calendar year 2024, regardless of whether you redeem your securities if they were issued in the year 2004.
