Joseph Edgeworth

Joe Edgeworth

Joe has been a financial planner since 1992, working with individuals, families and businesses. His company focuses on teaching people how they can invest their money safely, with a 100% guarantee of their principle, earn a very respectable rate of return, and have income guaranteed for their lifetime. Joe has also shown over 2,000 people how to protect their nest egg and their loved ones from the catastrophic cost of Long-Term Care, along with showing parents and grandparents how to safely and tax efficiently transfer their wealth to their children.

The Edgeworth Insurance Group

2715 Spring Valley Rd.

Lancaster, Pennsylvania 17601

joe.edgeworth@retirevillage.com (800) 824-8609
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Savings Bonds and Tax Deferral

By Bill Broich|


Savings Bonds and tax liability, make sure you understand the details

 

The US Treasury issues savings bonds and is considered a debt instrument (securities). These bonds help pay for the US Government’s budget needs, the government in essence “borrows” the funds from the bond purchaser. Most issues of savings bonds are low interest but are considered entirely safe.


There are two primary bond types, Series EE and Series I. Series EE Savings Bonds can be issued in lower face amounts such as $50. They are always sold at face value, and the interest is applied at the time of redemption. Series EE bonds are restricted to no more than $10,000 per calendar year, and you must hold the bonds for at least 5 years, the penalty for early redemption is no interest will be paid for the previous 3 months. After 5 years of ownership, full interest is available at redemption.


Series I Savings Bonds have an inflation feature. These bonds are sold at face value, but like Series EE bonds you can only purchase $10,000 in any one year. Series 1 offers a fixed rate and an adjustment in overall yield can be made if certain conditions apply. Also like Series EE, any redemption before 5 years can have a loss of interest penalty (last 3 months). After 5 years of 0f ownership, there is no penalty.


Tax liability is deferred on both series of bonds until the funds are accessed or the bond matures. Interest earned on savings bonds is considered ordinary income and is taxed as such when the funds are accessed.

 

More information can be found at www.treasurydirect.gov

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