Ask Terry Questions Interest on t bills

Interest on t bills

By Terry Savage on April 29, 2024 | Chicken Money

Have a good sum of money in t bills and notes, ( $300,000 )how can I avoid paying any penalty to the IRS for accruing too much interest by years end. This is all chicken money. Thanks

Terry Says

What penalty?  You owe ordinary income taxes on the interest you earn — no matter where you invest.  At least you don’t owe state income taxes (if your state has one) on Treasury bill interest.  And you owe the interest in the year in which the T-bill matures, even if you roll it over and get the interest up-front on a new T-bill.  Read this:

T-Bills beat CDs – Terry Savage

Yes, this is chicken money.  You’re keeping it safe in T-bills. And you owe  taxes on the interest you earn!



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