While bond owners may feel jolly when cashing-in bonds, they may not feel so merry when a 1099-INT is received.
Spirng Lake, NJ (PRWEB) November 21, 2013
SavingsBonds.com has officially declared December as Savings Bond Planning Month. While many are busy spending and celebrating during the holiday season, it is also an opportune time to review savings bond investments. According to the popular savings bond management company, getting savings bonds in order at the end of the year can save a lot of headaches at tax time next year.
Many don’t realize that when cashing in bonds, the difference between the purchase price and the cash-in value is considered reportable interest income. Many bonds are often worth more than their face value (the amount printed on the bond). However, when a bond is cashed in, any interest earned over $10 must be reported on one’s federal income tax return.
“While bond owners may feel jolly when cashing-in bonds, they may not feel so merry when a 1099-INT is issued either on the spot, or mailed to the bond owner early in the following year,” says SavingsBonds.com Marketing Director, Jackie Brahney.
Prior to the invention of do-it-yourself savings bond management tools, it used to be a cumbersome and nearly impossible task for bond owners to determine the interest earned amounts when either cashing-in savings bonds, or reporting the interest earned annually on their savings bonds.
With the latter, reporting the interest earned annually was complicated, and not often taken advantage of, despite the benefit of not owing taxes when cashing in. By reviewing a December Savings Bond Inventory Report, bond owners - especially those on fixed incomes - can now easily determine and report the year-to-date interest earned on their bonds.
Luckily for bond owners, better online calculators provide both the total amount of interest earned, along with the annual interest amounts for each bond. When bond owners cash-in their bonds, they can easily determine how much interest income will need to be reported on their federal tax return. For others, they can incorporate a new financial planning strategy by declaring all of the interest earned to date on their bonds, and then report the interest income earned each year.
While celebrating the holidays with friends and family, bring up the subject of savings bonds. Impress them by informing them how bond owners can easily avoid unpleasant tax surprises when cashing in bonds, and annual interest reporting options that might help them out at tax season next year.
SavingsBonds.com is the #1 non-governmental site valuing over $1.1 billion in savings bonds. Complimentary calculator offers personalized, unique color-coded, Savings Bond Inventory Report© featuring “what this means to you,” helps bond owners avoid losing money and maximize their investment. Extensive, consumer-friendly information center, helpful videos, newsletters, current series bond rates, lost bond services, re-issue services, purchase bonds link, online and popular government forms available.
About SavingsBonds.com VIP Membership:
SavingsBonds.com VIP Members have 4 services not offered elsewhere. 1. Bond Inventory Report© available/updated 24/7 indicates current bond values, interest rates, timing, taxation and maturity issues, displayed on an easy to understand, color-coded, personalized, bond-by-bond statement. 2. Bi-monthly Alerts! © Emailed summary statements specific to Members' bond inventory, provides inventory totals, interest rates/earnings, helpful strategies regarding current and upcoming financial events, including maturity and taxation issues. 3. Cash In Report© ranks bonds in performance order. Eliminates guesswork on which bonds to cash in first. 4. Daily Bond Tips. The ultimate savings bond Membership offering superior bond management helps investors avoid forfeiture of interest, double taxation and potential IRS tax situations. Bond services, re-issue services, purchase bonds link, online and popular government forms also available.