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Return To Bonds FAQ Archive   How much tax do I pay when I cash in my bonds? Answered By Editor It depends on how much interest rate you acquired. You have to pay taxes as earnings in federal taxes. But, bonds are exempt from state or local taxes, which mean you don't have to pay taxes on state or local taxes. keywords: Bond | Bonds | Financing | Stocks | Taxes Cashing Us Savings Bonds Bond Investing

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