EE Bonds Maturing in 2022

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Swimmer
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EE Bonds Maturing in 2022

Post by Swimmer »

Hello all. I have a question that perhaps someone has encountered before. I know there’s a long way to do this, but was looking for an easier (and, likely, more accurate) method.

I’m looking at tax planning for 2022. It seems I bought a LOT of EE bonds in 1992.

I’d like to calculate the total interest on these bonds at maturity to assist my tax planning.

I’ve been all over the Treasury Direct and am actually very familiar with it. I know I can take each individual bond and calculate future interest and add it to accumulated interest, but there’s got to be a better way.

I figured if there’s a way, a Boglehead will know it. Thanks!
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JoeRetire
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Re: EE Bonds Maturing in 2022

Post by JoeRetire »

Swimmer wrote: Mon Dec 21, 2020 1:59 pm I’m looking at tax planning for 2022. It seems I bought a LOT of EE bonds in 1992.
Did you purchase them all in the same month? Are they all the same denomination?
I’d like to calculate the total interest on these bonds at maturity to assist my tax planning.

I’ve been all over the Treasury Direct and am actually very familiar with it. I know I can take each individual bond and calculate future interest and add it to accumulated interest, but there’s got to be a better way.
Calculate one using the "Value as of" feature and multiply by the number of bonds?
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Best Regards - Mel | | Semper Fi
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Swimmer
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
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Swimmer
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

JoeRetire wrote: Mon Dec 21, 2020 2:32 pm
Swimmer wrote: Mon Dec 21, 2020 1:59 pm I’m looking at tax planning for 2022. It seems I bought a LOT of EE bonds in 1992.
Did you purchase them all in the same month? Are they all the same denomination?
I’d like to calculate the total interest on these bonds at maturity to assist my tax planning.

I’ve been all over the Treasury Direct and am actually very familiar with it. I know I can take each individual bond and calculate future interest and add it to accumulated interest, but there’s got to be a better way.
Calculate one using the "Value as of" feature and multiply by the number of bonds?

Various dates. Several denominations. I think I’m just lazy and trying to take the easy way out. I think the calculator provided by Mel L will at least help me eliminate the need to manually compound interest. Yes, that will help a lot.
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Re: EE Bonds Maturing in 2022

Post by Soon2BXProgrammer »

Swimmer wrote: Mon Dec 21, 2020 5:24 pm
Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
i might remember incorrectly.

Paperbonds you used to pay half the face value.

electronic bonds i thought you paid face value...

So make sure you factor that into the calculation...
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Re: EE Bonds Maturing in 2022

Post by usagi »

More or less here you go, note mine were paper bonds purchased in 1993, not 1992, but the interest earned is clear so you need to only adjust by a year.

Total Price $5,000.00
Total Value $18,780.00
Total Interest $13,780.00
YTD Interest $728.00
Serial # XXXXXXXX
Series EE
Denom $10,000
Issue Date 01/1993
Next Accrual 01/2021
Final Maturity 01/2023
Issue Price $5,000.00
Interest $13,780.00
Interest Rate 4.00%
Value $18,780.00
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

Swimmer wrote: Mon Dec 21, 2020 5:24 pm
Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
The reason is that paper bonds are issued in known denominations, whereas electronic bonds can be in any denomination, as long as it meets the minimum requirement.

Because of the issue date, you must have converted your paper bonds to electronic, so they should be easy to value using that tool.
Best Regards - Mel | | Semper Fi
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Re: EE Bonds Maturing in 2022

Post by SnowBog »

Swimmer wrote: Mon Dec 21, 2020 5:24 pm Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
If you have electronic, then you should know their "current value" and interest rate.

Couldn't you just use calculate the remaining interest?

There's a number of online calculators for interest...

Or you could do something like this in Excel:

Code: Select all

=fv(rate/12,months,0,-current value)
For example, if your rate is 4%, with 18 months left, and a current value of $12345.67:

Code: Select all

=fv(4%/12,18,0,-12345.67)
This will show you how much the "future value" [FV] will be at the end. You can subtract your purchase price, and the balance is interest.
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Swimmer
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

Mel Lindauer wrote: Mon Dec 21, 2020 5:51 pm
Swimmer wrote: Mon Dec 21, 2020 5:24 pm
Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
The reason is that paper bonds are issued in known denominations, whereas electronic bonds can be in any denomination, as long as it meets the minimum requirement.

Because of the issue date, you must have converted your paper bonds to electronic, so they should be easy to value using that tool.

You are correct. But the weird thing is the calculator doesn’t work for issue dates pre-1996.
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Re: EE Bonds Maturing in 2022

Post by JoeRetire »

Swimmer wrote: Mon Dec 21, 2020 5:28 pm
JoeRetire wrote: Mon Dec 21, 2020 2:32 pm
Swimmer wrote: Mon Dec 21, 2020 1:59 pm I’m looking at tax planning for 2022. It seems I bought a LOT of EE bonds in 1992.
Did you purchase them all in the same month? Are they all the same denomination?
I’d like to calculate the total interest on these bonds at maturity to assist my tax planning.

I’ve been all over the Treasury Direct and am actually very familiar with it. I know I can take each individual bond and calculate future interest and add it to accumulated interest, but there’s got to be a better way.
Calculate one using the "Value as of" feature and multiply by the number of bonds?

Various dates. Several denominations. I think I’m just lazy and trying to take the easy way out. I think the calculator provided by Mel L will at least help me eliminate the need to manually compound interest. Yes, that will help a lot.
Mel provided a link to something on the TreasuryDirect site. I thought you were thoroughly familiar with it? Okay, good luck.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

Swimmer wrote: Mon Dec 21, 2020 6:19 pm
Mel Lindauer wrote: Mon Dec 21, 2020 5:51 pm
Swimmer wrote: Mon Dec 21, 2020 5:24 pm
Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
The reason is that paper bonds are issued in known denominations, whereas electronic bonds can be in any denomination, as long as it meets the minimum requirement.

Because of the issue date, you must have converted your paper bonds to electronic, so they should be easy to value using that tool.

You are correct. But the weird thing is the calculator doesn’t work for issue dates pre-1996.
You need to be sure to select.EE Binds when doing the calculation. Then it will will work for your issue date.
Best Regards - Mel | | Semper Fi
Topic Author
Swimmer
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

Mel Lindauer wrote: Tue Dec 22, 2020 12:22 am
Swimmer wrote: Mon Dec 21, 2020 6:19 pm
Mel Lindauer wrote: Mon Dec 21, 2020 5:51 pm
Swimmer wrote: Mon Dec 21, 2020 5:24 pm
Mel Lindauer wrote: Mon Dec 21, 2020 2:43 pm Here you go (you don't need to put in the serial number):

https://www.treasurydirect.gov/BC/SBCPrice
Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
The reason is that paper bonds are issued in known denominations, whereas electronic bonds can be in any denomination, as long as it meets the minimum requirement.

Because of the issue date, you must have converted your paper bonds to electronic, so they should be easy to value using that tool.

You are correct. But the weird thing is the calculator doesn’t work for issue dates pre-1996.
You need to be sure to select.EE Binds when doing the calculation. Then it will will work for your issue date.
Thanks, Mel. Tried it again. I used issuance date of 06/1992 and redemption date 06/2022. I got the following:

“The following error(s) have occurred
-‘Valid as of’ dates are 01/1996 through 05/2021”

Oh, I definitely used EE bonds in the input. Thanks again for your help.
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Re: EE Bonds Maturing in 2022

Post by Soon2BXProgrammer »

Swimmer wrote: Tue Dec 22, 2020 8:57 am
Thanks, Mel. Tried it again. I used issuance date of 06/1992 and redemption date 06/2022. I got the following:

“The following error(s) have occurred
-‘Valid as of’ dates are 01/1996 through 05/2021”

Oh, I definitely used EE bonds in the input. Thanks again for your help.
My guess is because the calculator can't project farther into the future because of this rule:
Issued from November 1982 through April 1995
An EE bond with an issue date in the time period from November 1982 through April 1995 earns interest either

at a guaranteed rate or guaranteed rates; or
at a market-based rate (85% of 6-month averages of 5-year Treasury securities yields)
whichever category of rates, separately, by itself, over the entire period from date of issue, produces the higher redemption value for the bond.
https://www.treasurydirect.gov/indiv/re ... 051995.htm
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Re: EE Bonds Maturing in 2022

Post by 2cents2 »

Would you be cashing any bonds in prior to the 30 year point? If not, you could determine the value of 1 bond and then apply that to all the other bonds that were under the same rules.

What I do is keep a spread sheet with maturity dates and total interest earned at maturity to keep track of my tax liability (I also do withholding on each bond, so I keep track of the amount of taxes I have paid, too). I get an email from treasury whenever a savings bond has matured. The bond is converted to a Zero-Percent Certificate of Indebtedness (C of I) in my account. (The Zero-Percent Certificate of Indebtedness earns no interest ).

edited to add: This falls under the category of my pet peeves about treasury direct (or maybe this is just me being grumpy): treasury direct excuses themselves from mailing a 1099-INT, so you have to remember to log in and print it out at tax time. (I envision this might be a challenge for my heirs if I still hold savings bonds at my death.) And, apparently since they don't have a care in the world about actually having to print this tax form out, they have made the form multiple pages long without any sensible formatting when you have print it out. :oops:
Last edited by 2cents2 on Tue Dec 22, 2020 9:46 am, edited 1 time in total.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

Swimmer wrote: Tue Dec 22, 2020 8:57 am
Mel Lindauer wrote: Tue Dec 22, 2020 12:22 am
Swimmer wrote: Mon Dec 21, 2020 6:19 pm
Mel Lindauer wrote: Mon Dec 21, 2020 5:51 pm
Swimmer wrote: Mon Dec 21, 2020 5:24 pm

Thanks so much but I wonder why it says, “for paper bonds only “? Mine are electronic.
The reason is that paper bonds are issued in known denominations, whereas electronic bonds can be in any denomination, as long as it meets the minimum requirement.

Because of the issue date, you must have converted your paper bonds to electronic, so they should be easy to value using that tool.

You are correct. But the weird thing is the calculator doesn’t work for issue dates pre-1996.
You need to be sure to select.EE Binds when doing the calculation. Then it will will work for your issue date.
Thanks, Mel. Tried it again. I used issuance date of 06/1992 and redemption date 06/2022. I got the following:

“The following error(s) have occurred
-‘Valid as of’ dates are 01/1996 through 05/2021”

Oh, I definitely used EE bonds in the input. Thanks again for your help.
Sorry, I misunderstood. Thought you were trying to get the present (or near present) value of your bonds. This is not a long-term future projection tool when the interest rate is unknown.
Best Regards - Mel | | Semper Fi
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Re: EE Bonds Maturing in 2022

Post by AlmstRtrd »

The EE-Bonds that I have maturing on 5/1/21 are in $1,000 denominations. Purchase price for each bond was $500 (half of the face value) and the final value will be $2,073.60 per bond. So that's $1,573.60 in interest per bond.

It looks like all of my bonds purchased in 1992 will have the same final value as those purchased in 1991.

Hope this helps!
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Re: EE Bonds Maturing in 2022

Post by AlmstRtrd »

If my last post is not clear enough, multiplying each bond's face value times 4.15 gets you very close to the amount of final maturity for those 1992 EE-Bonds. Then don't forget to subtract the face value to calculate your total interest on each bond.
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

AlmstRtrd wrote: Tue Dec 22, 2020 11:38 am If my last post is not clear enough, multiplying each bond's face value times 4.15 gets you very close to the amount of final maturity for those 1992 EE-Bonds. Then don't forget to subtract the face value to calculate your total interest on each bond.
Thank you! Somehow I missed this. This will really help. :happy
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Re: EE Bonds Maturing in 2022

Post by bac »

I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
We didn’t think about that 30 years ago, did we?
We may be in the same boat
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

AlmstRtrd wrote: Tue Dec 22, 2020 11:38 am If my last post is not clear enough, multiplying each bond's face value times 4.15 gets you very close to the amount of final maturity for those 1992 EE-Bonds. Then don't forget to subtract the face value to calculate your total interest on each bond.
Did you mean to subtract the purchase price as opposed to subtract the face value? Half the face value (originally paper bonds) is actually interest, correct?
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Re: EE Bonds Maturing in 2022

Post by CABob »

This is off-topic but has reminded me, does anyone besides me miss the Savings Bond Wizard?
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Re: EE Bonds Maturing in 2022

Post by AlmstRtrd »

Swimmer wrote: Tue Dec 22, 2020 12:21 pm
AlmstRtrd wrote: Tue Dec 22, 2020 11:38 am If my last post is not clear enough, multiplying each bond's face value times 4.15 gets you very close to the amount of final maturity for those 1992 EE-Bonds. Then don't forget to subtract the face value to calculate your total interest on each bond.
Did you mean to subtract the purchase price as opposed to subtract the face value? Half the face value (originally paper bonds) is actually interest, correct?


Yes, that is what I meant to write. Sorry about that! As you would infer from that 4.15 factor I gave above as an estimate, your 1992 bonds will have more than quadrupled in value since you bought them (if held to maturity).

And as bac mentioned, you might think about spreading the interest gains over two or three years, but it's hard to part with that steady 4% even if it does make sense for tax planning!
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

AlmstRtrd wrote: Tue Dec 22, 2020 2:29 pm
Swimmer wrote: Tue Dec 22, 2020 12:21 pm
AlmstRtrd wrote: Tue Dec 22, 2020 11:38 am If my last post is not clear enough, multiplying each bond's face value times 4.15 gets you very close to the amount of final maturity for those 1992 EE-Bonds. Then don't forget to subtract the face value to calculate your total interest on each bond.
Did you mean to subtract the purchase price as opposed to subtract the face value? Half the face value (originally paper bonds) is actually interest, correct?


Yes, that is what I meant to write. Sorry about that! As you would infer from that 4.15 factor I gave above as an estimate, your 1992 bonds will have more than quadrupled in value since you bought them (if held to maturity).

And as bac mentioned, you might think about spreading the interest gains over two or three years, but it's hard to part with that steady 4% even if it does make sense for tax planning!


Thanks very much!
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

CABob wrote: Tue Dec 22, 2020 12:56 pm This is off-topic but has reminded me, does anyone besides me miss the Savings Bond Wizard?
Yes, I definitely miss it.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
Best Regards - Mel | | Semper Fi
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Re: EE Bonds Maturing in 2022

Post by SnowBog »

Out of curiosity, how are taxes handled when you redeem across multiple years?

For example $10k initial purchase now worth $40k, if you sell $10k my assumption is 75% is considered interest (and taxed)?

(Can't imagine we'd get to take out principal first, but figured I'd ask, as I never thought of spreading these out over multiple years.)
Last edited by SnowBog on Tue Dec 22, 2020 9:21 pm, edited 1 time in total.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

SnowBog wrote: Tue Dec 22, 2020 6:20 pm Out of curiosity, how are taxes handled when you redeem across multiple yearss?

For example $10k initial purchase now worth $40k, if you sell $10k my assumption is 75% is considered interest (and taxed)?

(Can't imagine we'd get to take out principal first, but figured I'd ask, as I never thought of spreading these out over multiple years.)
Each bond has a value that includes both principle and interest. So, if you have 30 bonds and you redeem 15 in a given year, then you'd owe taxes on the earned interest on those 15 bonds. It's calculated for each bond.
Best Regards - Mel | | Semper Fi
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Re: EE Bonds Maturing in 2022

Post by SnowBog »

Mel Lindauer wrote: Tue Dec 22, 2020 8:24 pm
SnowBog wrote: Tue Dec 22, 2020 6:20 pm Out of curiosity, how are taxes handled when you redeem across multiple years?

For example $10k initial purchase now worth $40k, if you sell $10k my assumption is 75% is considered interest (and taxed)?

(Can't imagine we'd get to take out principal first, but figured I'd ask, as I never thought of spreading these out over multiple years.)
Each bond has a value that includes both principle and interest. So, if you have 30 bonds and you redeem 15 in a given year, then you'd owe taxes on the earned interest on those 15 bonds. It's calculated for each bond.
Understood. My question was more for selling a single bond over multiple years, selling x% of the bond one year, then the rest in later year(s).

I'd just never thought through the idea of selling over multiple years... (My current plan is they'll be spent in specific years - but a lot can change in the next 19+ years...)
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Re: EE Bonds Maturing in 2022

Post by TheGreyingDuke »

Mel Lindauer wrote: Tue Dec 22, 2020 5:04 pm
bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
I have a pile of those early 1990's EE bonds, I am contributing them to a 529 for grandchildren to avoid the taxes. This is a contribution that I would otherwise make with (Federally) taxed money; NY gives me a deduction of $10k each year which I will forego.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
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Swimmer
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Re: EE Bonds Maturing in 2022

Post by Swimmer »

TheGreyingDuke wrote: Tue Dec 22, 2020 9:29 pm
Mel Lindauer wrote: Tue Dec 22, 2020 5:04 pm
bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
I have a pile of those early 1990's EE bonds, I am contributing them to a 529 for grandchildren to avoid the taxes. This is a contribution that I would otherwise make with (Federally) taxed money; NY gives me a deduction of $10k each year which I will forego.

We looked into that, but there are strict income limitations for use of bonds tax free for education.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

TheGreyingDuke wrote: Tue Dec 22, 2020 9:29 pm
Mel Lindauer wrote: Tue Dec 22, 2020 5:04 pm
bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
I have a pile of those early 1990's EE bonds, I am contributing them to a 529 for grandchildren to avoid the taxes. This is a contribution that I would otherwise make with (Federally) taxed money; NY gives me a deduction of $10k each year which I will forego.
You might want to check into the legal requirements for avoiding taxes by contributing Savings Bond redemptions to the 529 for grandchildren. (The Savings Bonds must be titled correctly in order to qualify for the exemption.)

You just may get a big tax bill down the road if the bonds don't qualify because they weren't titled correctly or you're not the legal guardian. INAL and this isn't meant to be legal advice; simply suggesting you check carefully before you make moves that may well come back to haunt you.
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Re: EE Bonds Maturing in 2022

Post by TheGreyingDuke »

Mel Lindauer wrote: Wed Dec 23, 2020 2:33 pm
TheGreyingDuke wrote: Tue Dec 22, 2020 9:29 pm
Mel Lindauer wrote: Tue Dec 22, 2020 5:04 pm
bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
I have a pile of those early 1990's EE bonds, I am contributing them to a 529 for grandchildren to avoid the taxes. This is a contribution that I would otherwise make with (Federally) taxed money; NY gives me a deduction of $10k each year which I will forego.
You might want to check into the legal requirements for avoiding taxes by contributing Savings Bond redemptions to the 529 for grandchildren. (The Savings Bonds must be titled correctly in order to qualify for the exemption.)

You just may get a big tax bill down the road if the bonds don't qualify because they weren't titled correctly or you're not the legal guardian. INAL and this isn't meant to be legal advice; simply suggesting you check carefully before you make moves that may well come back to haunt you.
My understanding was that I needed to put them into a 529 where I was the beneficiary as well as the owner and then I could change the benficiary.
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Re: EE Bonds Maturing in 2022

Post by Mel Lindauer »

TheGreyingDuke wrote: Wed Dec 23, 2020 3:30 pm
Mel Lindauer wrote: Wed Dec 23, 2020 2:33 pm
TheGreyingDuke wrote: Tue Dec 22, 2020 9:29 pm
Mel Lindauer wrote: Tue Dec 22, 2020 5:04 pm
bac wrote: Tue Dec 22, 2020 12:10 pm I have three $10,000 savings bonds maturing in 2022, but at least one is going to be redeemed in 2021 to spread out the tax burden. Actually, it's possible one could be redeemed this year as well, depending on what my tax picture looks like. With the 4 percent interest rate in the current environment, I hate to redeem this early, but it might make sense.
I had the maximum allowed amount of EE Bonds from 1992 and 1993, and they had/have a huge tax burden, so, as you suggested you might do, I've been redeeming part of each lot for the past few years to ease the tax burden. But, believe me, it really hurts to redeem something paying a risk-free, tax-deferred 4% in today's dismal interest rate environment.
I have a pile of those early 1990's EE bonds, I am contributing them to a 529 for grandchildren to avoid the taxes. This is a contribution that I would otherwise make with (Federally) taxed money; NY gives me a deduction of $10k each year which I will forego.
You might want to check into the legal requirements for avoiding taxes by contributing Savings Bond redemptions to the 529 for grandchildren. (The Savings Bonds must be titled correctly in order to qualify for the exemption.)

You just may get a big tax bill down the road if the bonds don't qualify because they weren't titled correctly or you're not the legal guardian. INAL and this isn't meant to be legal advice; simply suggesting you check carefully before you make moves that may well come back to haunt you.
My understanding was that I needed to put them into a 529 where I was the beneficiary as well as the owner and then I could change the benficiary.
OK, sounds like a good workaround. Hadn't hear anyone use that strategy before.
Best Regards - Mel | | Semper Fi
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