What to do when Series EE US Savings Bonds mature

Back in 1986, based on your advice, we purchased Series EE US Savings Bonds. They are still earning 4%, but mature in 2016. I don’t believe they earn interest beyond 2016. The value of the bonds is $61.4K with $15K cost basis. Is there any alternative to paying taxes on the $46.4 interest? We have the same situation again in 2022, 23, & 24 except at 2 x the above numbers in each year.

Terry Says: Well, look on the bright side — at least you earned a lot of money!  Those bonds purchased long ago continued to pay high base rates during all these recent low interest rate years!  They will be ordinary income in the year you cash them in.  Consult your tax advisor about the impact of this windfall on other issues in your tax return.  And realize that this might push you into paying a higher Medicare Part B premium, as well!  Also, be sure to set aside some of the cash for an estimated tax payment!  I can’t apologize for making money for you — and you vote for the reps in Washington who raise your taxes! ( At least this money will be exempt from state taxes!)  Terry