Saving Bond Interest ?

[Robert11]

Hi,

Getting on in years now, and this stuff isn't getting any simpler, at least
for me.

I cashed in a fair number of E and EE Savings bonds in 2005 as they weren't
accruing interest any longer.
Most of the cash I received for them was mainly interest, as they were quite
old.

Is the interest on them just simply handled as "interest, as e.g., a bank's
CD interest would be ?

Or, is there some other way of handling it so as to minimize the tax due ?

Much thanks,
B.

 

[Paul Thomas, CPA]

Getting on in years now, and this stuff isn't getting any simpler, at
least for me.

I cashed in a fair number of E and EE Savings bonds in 2005 as they
weren't accruing interest any longer.
Most of the cash I received for them was mainly interest, as they were
quite old.

Is the interest on them just simply handled as "interest, as e.g., a
bank's CD interest would be ?

Or, is there some other way of handling it so as to minimize the tax due ?

For the most part it's the same as bank interst, with one exception. If
your state exempts federal interest, as some do, you want to make sure you
take advantage of that.