If you are
expecting a
tax refund when we file your 2009
return, you may view it as a form of savings
and fully intend to sock it away for a rainy
day. But
once that refund check is in your hands, the
temptation to spend it can be great.
In the past, your alternatives to receiving
a check in the mail were limited. You could
authorize the IRS to direct deposit your
refund into a checking or savings account or
have the IRS send the funds directly to your
IRA.
Starting with your 2009 return, the IRS will
be offering you another option for saving
your refund. You can direct the IRS to use
all or part of your refund to buy U.S.
savings bonds.
Savings bonds can be purchased
through the refund option in denominations
of $50, $100, $200, $500, and $1,000. If you
buy $250 or less of savings bonds with a
tax refund, $50 Savings Bonds will be
issued in your name (or in the names of
yourself and your spouse if you file a joint
return). If the amount is over $250, $50
Savings Bonds will be issued up to $250 and
the fewest possible
additional Savings Bonds will be
issued for the remainder amount. The
Treasury Department will mail the
bonds directly to you once your return is
processed.
Aside from securing your tax refund from
temptation, the
savings bond option may have other
advantages.
Savings bond interest is subject to
federal income tax; however, the tax
can be deferred until the bonds are
redeemed. In addition, if you qualify, you
may be able to exclude all or part of the
interest earned if the bond proceeds are
used for higher education costs.
If you would like more information on the
new savings bond option or on the tax
treatment of U.S. savings bonds, please feel
free to call on us.
