Cashing savings bonds?

Interest on savings bonds can be reported in one of two ways.

1. You can report the interest each year as it accrues by checking the federal website (Savings Bond Interest Calculator) for the value using your bond number; OR
2. You can report the interest earned in full at either maturity of the bond or when the bond is cashed, whichever comes first.

To record this income in TurboTax Online follow the steps below.

1. Select Federal Taxes.
2. Select Wages & Income
3. Scroll down to Interest and Dividends group.
4. Click on the Start button to the right of the Interest on 1099-INT category.
5. Answer Yes to Did you receive any interest income?
6. Click I'll type it in myself
7. Click the box next to My form has info in more than just box 1 (this is uncommon) to show boxes 2-14.
8. Enter your interest in Box 3
9. Continue to complete your tax return.  

In January, or early February, you will receive a form 1099-INT from the bank (or the US Treasury) that cashed the bond, reporting the amount of interest you were paid.  The 1099-INT will only have the interest amount, not the full amount the bond was cashed for.