Joined Aug 2015
L3: Novice
Forum Thread
Time to sell your I Bonds
February 26, 2024 at
06:08 PM
Thread Details
Depending on your purchase date, I bonds are paying less than 4%. Many CDs are paying over 5%.
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Yes it's tax free
If you bought under 1 year and sell so you must get 3 month interest earned loose
Lots of incorrect advice being given to you.
Interest is taxable at the federal level as ordinary income. For states with an income tax, it is exempt at the state level.
For federal taxes, you can elect to include the interest in your taxable income as it is earned (accrued) each year or simply wait until you actually get the proceeds and pay tax on all of it at that time. Most folks do the latter but the first option may save you a few bucks depending on your tax bracket each year.
https://www.treasurydir
Interest is taxable at the federal level as ordinary income. For states with an income tax, it is exempt at the state level.
For federal taxes, you can elect to include the interest in your taxable income as it is earned (accrued) each year or simply wait until you actually get the proceeds and pay tax on all of it at that time. Most folks do the latter but the first option may save you a few bucks depending on your tax bracket each year.
https://www.treasurydir
This.
As to when to sell, with T-bills yielding 5.3+% and banks CDs at or near 5% depending on the term, there is no reason imo to hold onto the I-bonds bought when the rate was 7-9+% as it is now in the 3-4% range. You should imo sell once you have 1 year accrued and 3 months at a significantly lower rate have past. See:
http://eyebonds.info/ibonds/
as a guide.
My 2 cents.
As to when to sell, with T-bills yielding 5.3+% and banks CDs at or near 5% depending on the term, there is no reason imo to hold onto the I-bonds bought when the rate was 7-9+% as it is now in the 3-4% range. You should imo sell once you have 1 year accrued and 3 months at a significantly lower rate have past. See:
http://eyebonds.info/ibonds/
as a guide.
My 2 cents.
That said, I do agree with your comment regarding the current I-bond rates.
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Interest is taxable at the federal level as ordinary income. For states with an income tax, it is exempt at the state level.
For federal taxes, you can elect to include the interest in your taxable income as it is earned (accrued) each year or simply wait until you actually get the proceeds and pay tax on all of it at that time. Most folks do the latter but the first option may save you a few bucks depending on your tax bracket each year.
https://www.treasurydir
As to when to sell, with T-bills yielding 5.3+% and banks CDs at or near 5% depending on the term, there is no reason imo to hold onto the I-bonds bought when the rate was 7-9+% as it is now in the 3-4% range. You should imo sell once you have 1 year accrued and 3 months at a significantly lower rate have past. See:
http://eyebonds.info/ibonds/
as a guide.
My 2 cents.
Wrong. The INTEREST is taxed, but not the value of the bond.