Home › Fairmark Forum › Kids and College › Buying a saving bond for child: yearly or deferred taxation of interest? › Reply To: Buying a saving bond for child: yearly or deferred taxation of interest?
This issue is relevant if you choose to create a custodial account for your son, as described in my response to your other post. To choose to report the income each year, file a return for your son for the first year to which this applies, reporting the amount of interest up to that point and stating that the child chooses to pay interest annually. Retain a copy of this return. Returns are not required for subsequent years if your son doesn’t meet the income threshold for filing. See page 8 of IRS Pub 550.