Keeping Series E savings bonds past their maturity.
I received a letter from The Treasury Department saying I should (not that I have to) cash in some matured Series E savings bonds. I purposely have not cashed them in as they can put us in a higher income tax bracket. I try to figure out each year how much we can “afford” to cash without raising our tax bracket or causing too much due tax due. Since the CDs. ,money markets, etc. pay little or nothing we are not losing out. We are 80 and 83 years old. We have $1,000 bonds worth $2306 and do not need the money. Your thoughts. Just want to make sure we DO NOT HAVE TO CASH THEM WHEN THEY MATURE. Thanks Terry
Terry Says
That’s such an interesting question. When Savings Bonds mature, they no longer accrue interest. And technically speaking, you are not required to cash them in. BUT, technically speaking, you ARE required to pay the taxes on the interest in the year the bonds mature!
Now, I’m not sure that the Treasury (still trying to get stimulus checks to the right people and a lot of other big projects) is really going to come after you and report you to the IRS for not cashing in your bonds right away! But there could be a penalty on unreported income if they decide to pursue this.
