Many people are now having the option to buy U.S. savings bonds with their tax returns. This is something that has been offered for some time, but currently people are asking why they should do this? What good or benefit comes from doing so
By looking at these tax savings bonds from an accountant point of view, you can get more knowledge on why you might want to choose these when getting your return and how they can benefit you in the long run when you choose to do so
Purchasing Savings Bonds with Your Return
Many people are choosing to do this with their tax returns because the savings bonds not only hold the money, but they collect interest. This helps the person have something that they can hold onto that is going to be a better investment for them in the future
Becoming available in early 2010, the US Treasury made it easier for tax filers to obtain savings bonds through their tax returns. The filers would just have to submit Form 8888 and the portion that they state on the file will be designated to savings bonds that will be purchased and then sent to them
The savings bonds go to the address that the filer chooses, allowing them to obtain the savings bonds, hold onto them and do with them what they wish. Those that wish to use this option do not have to put their personal banking information into the IRS website or onto the form as they do not need to have anything deposited into their account
Everyone has the option to purchase up to $5,000 in savings bonds within the calendar year. This provides everyone with an option to do this with their tax return on any money owed if they so choose, though it is not something that is required. The filer can choose a paper check or direct deposit of their return if they wish, as well
Savings Bonds FAQ
If you’re considering purchasing a savings bond, then you will want to know some information about them to make an informed decision on whether or not this is something you want to do
Does interest accrue on the savings bond
Yes, interest will continue to accrue on the savings bond for up to 30 years or will stop if the savings bond is cash in before the 30 year time limit is up
Do I pay taxes on the savings bonds that I have
Savings bonds are exempt from local and state law taxes. However, federal taxes will have to be paid on the interest of the savings bond that accrued. This can be done once the savings bond matures or when the person cashes it in. It does not have to be done every year that the person holds onto the savings bond
What happens if the savings bond is lost
They keep records of the savings bonds that are out there, who they are owned too, if they are redeemed and so on. Due to this, many people can get copies of their savings bonds if they are lost somewhere or they need a copy due to having theirs destroyed. However, keep in mind that if a savings bond has to be reissued for any purpose, the person has to pay the taxable income that has accrued onto the savings bond in that time
Can I have digital copies of my savings bonds sent to me
If you’re a TreasuryDirect account owner, then you have the option of having savings bonds sent right through digital means. This means that you do not have to wait for the papers to arrive and you have access to all of the savings bonds that you have in your name in one place. You can request payouts of them in paper form when they mature when the time comes, but the digital copy can be accessed online
Remember, it is never too late to speak with a tax preparer that is able to come in and provide you with the right information regarding your tax returns. They are there to answer any and all questions you might have regarding your return. Find a tax preparer today and save!
Flynn Financial Group Inc