Watch Out for Interest Income on I-Bonds
Many of you invested in I-Bonds many years ago with a 30 year maturity and the interest can be major when they mature. Plan for the tax hit.
Many of you have purchased I-Bonds from the Treasury. These bonds typically mature in 30 years and for most farmers, the interest income is not taxable until you cash in the bonds. A farmer can elect to report this income each year, but most farmers do not make this election.
If you only purchased a $1,000 of these bonds, then the tax hit may not be much. But what if you purchased $10,000 or more of these bonds. Early on, a married couple was allowed to purchase up to $60,000 of bonds each year and this can add up.