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Tax Planning/Reporting tax on EE bonds

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Question
Hi Owen,
I have some EE savings bonds that will mature in 2017. I didn't report the interest  each year, I let it accrue over the 30 years of the bond. I was planning to redeem some in 2017 and some in 2018 to spread the taxes on the interest over 2 years. I just stumbled across some info on the US Treasury Bond website that says that the taxes on interest must be reported when the bonds are sold OR in the year they mature. Correct me if I'm wrong, I won't be able to redeem any of the bonds in 2018 and report that interest on my 2018 taxes?? But, I can redeem some bonds in 2016 and report the interest on my 2016 taxes. Then sell the rest of the bonds in 2017 and report that interest on my 2017 taxes??

Answer
Bob - According to the Treasury Department web site (https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eetaxconsider.htm), the year the bonds stop earning interest is when the tax on the interest must be paid if you haven't been reporting it each year.

You're correct in your assumption that redeeming in 2018 is not the issue; if they mature in 2017, they get reported in 2017.

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OWEN S. ARNOFF, EA

Expertise

As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.

Experience

I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

Organizations
National Association of Tax Professionals

Publications
http://www.amazon.com/Owen-Arnoff/e/B00BLRIZNU/ref=ntt_dp_epwbk_2

Education/Credentials
Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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