Hey, I have a question about taxes on Savings Bonds and Stocks?
April 22, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer Jeremy’s question about Bonds?:
I recently cashed out some Stocks and Savings Bonds and was wondering how much I had to save for taxes. I cashed out $6,750 in Savings Bonds and $4,500 Stocks. I’m gonna file single and no taxes have been paid on any of the stocks or bonds and this is for 2007. Is it still 10% up to $7825 then 15% on the rest? If that is my only income in 2007 am I right that I’ll owe roughly $1,300 for 2007? Doesn’t have to be exact just making sure I save what I’ll need to pay for taxes so I won’t be in debt. This is the 1st time I’ve messed with stocks and bonds (Oh yeah, They were EE bonds) and not sure about taxes on them. Thanx
How Much Is My Savings Bond Worth
I recently cashed out some Stocks and Savings Bonds and was wondering how much I had to save for taxes. I cashed out $6,750 in Savings Bonds and $4,500 Stocks. I’m gonna file single and no taxes have been paid on any of the stocks or bonds and this is for 2007. Is it still 10% up to $7825 then 15% on the rest? If that is my only income in 2007 am I right that I’ll owe roughly $1,300 for 2007? Doesn’t have to be exact just making sure I save what I’ll need to pay for taxes so I won’t be in debt. This is the 1st time I’ve messed with stocks and bonds (Oh yeah, They were EE bonds) and not sure about taxes on them. Thanx
How Much Is My Savings Bond Worth
Bonds Feedback: i would talk to a banking professional regarding this matter.
Bonds Feedback: you only pay taxes on the interest earned on the savings bonds as well as any gains from the stocks….if any losses occured upon your sale of stock you can write them off against any gains
you are gonna need to research yourself what each stock was bought at originally or talk with someone at the brokerage house who processed the sale to find out your cost basis
when you cashed in the savings bonds you should have received an interest receipt for amount that is taxable to you
anyways at the end of the year you should receive tax statements but yeah if you have no other income about 10-15% is the tax due
so if the stock was bought for at 30 a share and sold at 35 a share you only owe 5 per share
Bonds Feedback: EE bonds are tax exempt in some cases. If they are used for higher education they are exempt but there are restrictions on when they were purchased and who the actual owner is. Also some states do not tax them. If your state has an income tax check when you have your taxes prepared. You will not be liable for $4500 on the Stock. Only the gain over what you paid for them initially. Also deducted from the gain is the fee you paid to buy and sell them. If you paid $2500 for the stock and a $50 brokerage to buy and another $50 to sell then your gain is only $1900
Bonds Feedback: The interest on the savings bonds is taxable. Without knowing how much was interest it’s not possible to say what your tax situation might be.
The gain on the stocks is what’s taxable. Without knowing what you paid for them again it’s impossible to say for sure.
From your numbers it’s likely that you won’t owe any taxes if this is your ONLY income for the year as long as you’re not a dependent of another taxpayer but without all of the numbers it’s not possible to say for sure.
Bonds Feedback: I am not too sure if I understand the whole picture here, but will give you a few ideas based upon the way I understand it. First of all, you do not have to report interest earned on EE bonds to the State. Secondly, you only have to report the INTEREST on the Savings Bonds to the Federal. That is why I do not know if you are saying that the full $6,750 is the interest OR the total amount cashed in on the bonds. If it is the total amount, then the interest will be less than the $6,750. I have no experience in Stocks since it may have to be treated under capital gains under Schedule D with the Fed. However, here again, you would only report your profit. But, here again, $4,500 is not that much money to be concerned about under your situation.
So you have me a little puzzled. If that is the only income you have for 2007, you should owe very little or even nothing. Watch this. In 2006, you would not have to file any income tax return unless your income was at least $8,450. And that figure may be higher for 2007. So you will only owe 10% of a very small figure once you subtract a little more than $8,450. So it sounds like you might only owe around $270.00 at the most; if even, that. You would simply have to go through the tax form to know for sure. And you probably should use the 1040EZ form. Hope I have been of some help to you.
Bonds Feedback: I’m assuming that the numbers you give are the interest on the savings bonds, and the gain on the stocks. If that’s the total amount you got cashing them in, you might not owe anything.
You’ll get a standard deduction of $5350 and if you aren’t a dependent, a personal exemption of $3400, so the first $8750 won’t be taxed. So you’d only have $2500 taxable income, so at most you’d be paying 10% of that of $250 - if some of the stock gain is long term, might be less.
Depending on your state, you might also owe state income tax on the stock gains.