<p>A while ago my grandmother put in $4000 for me in savings bonds. Well last year we had to cash them because she ran out of money (messed up on just a few levels, I know). Yesterday I got a statement from the bank we cashed it at with all the interest we got in addition to the initial money (almost an extra $2000) and I'm wondering what I should do about it. First of all, do I need to file taxes? I'm still under 18, but since the interest was so muc am I required now? And what does this mean for my FA - should I report it to them? Because I guess it's officially income even though I didn't see a cent of it.</p>
<p>Do you use an accountant? If so, I would call them to find out the answer. They are familiar with FAFSA, and will be able to guide you correctly. Good Luck</p>
<p>Unfortunately I dont have one. Is there at least a website that could help me?</p>
<p>It should only affect your FAFSA if you have other income that brings you over the $3000 protected income limit. You will have to report it though.</p>
<p>I am no tax expert so do not want to give advice that is wrong. But here is a web site with some info:</p>
<p>and a quote from that site:</p>
<p>
[quote]
The IRS also has different rules for dependents who earn money. Generally, a child must file a return and pay tax due. But the amounts that trigger the filing depend on the type of income:</p>
<pre><code>* Earned, generally characterized as a salary, wages or tips.
* Or unearned, which includes investment interest or dividends, capital gains, unemployment benefits and some trust distributions.
</code></pre>
<p>If a child (or any unmarried dependent younger than 65)has unearned income of more than $850, that person has to file. A return is also required if the dependent's earned income is more than $5,150
[/quote]
</p>
<p>Thanks so much! Yeah, I'm screwed so that's good to know.</p>
<p>Really it is better than having them as assets in your name. If the bonds were still in your name as assets they would have been charged to your EFC at 20% of their value ($4000 plus interest of $2000 = $6000 x 20% = $1500 from assets). This would have been every year. The interest income will be charged at 50% so even if the whole amount is unprotected income it will be $2000 x 50% =$1000. Just this year. Assets in students name = bad for EFC</p>
<p>Where's the $6K now? Hopefully not in an account in your name. Income is one thing, assets are another.</p>