I recently started saving and I have 2 investments
My question is, when am I supposed to pay Federal and state tax on these. Every year, or at the end when I cash them.
Thanks.
(1) Unless you elect to pay tax on them yearly, you pay the tax when you cash them in. And you'll never pay state tax on them because the US Constitution prevents states from taxing interest on US debt obligations. (2) If I recall, for CDs with a maturity of one year or less, interest is taxable at maturity. For longer-term CDs interest is taxable each year.
-- Rich Carreiro snipped-for-privacy@animato.arlington.ma.us
The Bank will send you a Form 1099int at the end of the year with the correct amount of interest on which you report and pay tax. Missy Doyle
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