December Is Critical Planning Month For Savings Bond Owners According To

December is a critical planning month for savings bond owners according to It’s a great month for bond owners to do a savings bond checkup regardless if they are cashing in or holding onto their bonds. With proper timing and planning, investors can avoid paying excessive income taxes and possible IRS penalties.

During the month of December, many bond owners cash in savings bonds to use the proceeds to purchase holiday gifts. Unfortunately, they are not aware that the difference between the purchase price and the cash in amount of every bond is considered reportable interest. The bank or financial institution that redeems the bonds will issue a 1099-INT for the interest earned, likely at year-end.

Bond owners should also keep in mind if any other bonds were cashed in earlier in the year, say in January or February, to pay for last years holidays bills, they need to account for that additional interest income as well. Bond owners need to report the interest income on an income tax return in the year in which the bonds were cashed in. December is a good time to tally up all the interest income earned on the redeemed bonds thus far.

Furthermore, a bond checkup is important is to review maturity dates on all savings bonds. If a bond has reached final maturity (usually 30 years from issue date), even if the bond was not cashed in, IRS rules requires that individuals report the interest income earned on all savings bonds in the year in which the bonds reach final maturity (see IRS publication #550, Chapter 1, page 7).

“The bottom line is that savings bond owners need to include savings bonds in their financial planning. Most people don’t think about their savings bonds in their planning because they don’t know why it’s important,” says Jack Quinn, Founder of “With some basic bond financial facts now available online, bond owners can make smart choices, especially when it comes to cashing in bonds and the tax implications that may occur.”

Additionally, if an individual had investment losses in the stock market or if a home was destroyed or damaged due to a natural disaster, owners might be able to use some of those losses to offset the interest income from those redeemed savings bonds. Individuals, especially seniors who’s social security payments may be compromised by too much interest income, should discuss these potential tax situations with an accountant or tax attorney.

A little bit of analysis or planning at year-end might save bond owners from needlessly paying too much interest income and can avoid possible unpleasant tax situations or IRS penalties. By knowing some basic bond financial facts, individuals can easily determine if they should cash in bonds now, or plan to wait a few weeks and cash in the bonds next year.

About is a consumer friendly site offering a free savings bond calculator with a complimentary, personalized, color-coded, Savings Bond Inventory Report and unique reports and services that help bond owners avoid losing money and maximize their investment. The site also offers the most extensive savings bond information center with a non-governmental perspective. Current series EE and I bond rates, lost bond services and re-issue services, links to purchase savings bonds online and popular government forms are also available.

About VIP Membership: VIP Members receive bi-monthly emailed Alerts! which provide updated cash in values, interest rates and earnings, strategies about current and upcoming financial events, including maturity and taxation issues. The Cash In Report ranks bonds in performance order to eliminate guesswork on which bonds should be cashed in and which ones to hold. Members have 24/7 access to a personalized Bond Inventory Report indicating current bond values, interest rates, timing, taxation and maturity issues, displayed on an easy to understand, color-coded, bond-by-bond report. Optional Bond Tips, along with discounts on lost bond and re-issue services are included. The pro-active, investor friendly service helps avoid possible forfeiture of interest, double taxation and IRS situations, helps investors maximize their savings bond investment and avoid losing money.

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Jackie Brahney