IRS Tax Tip 2011-22, February 01, 2011
You can buy Series I U.S. Savings Bonds with a portion or all of your federal tax refund for yourself or anyone. Series I bonds are low-risk bonds that grow in value for up to 30 years. While you own them they earn interest and protect you from inflation.
Here are six things the IRS wants you to know about using your federal refund to purchase savings bonds.
- You may use a portion of your refund to purchase up to $5,000 in U.S. Series I Savings Bonds for yourself or anyone.
- The total amount of saving bonds purchased must be in multiples of $50. Any portion of your refund not used to buy savings bonds will be deposited into another financial account – such as a checking or savings account or can be mailed to you as a paper check.
- Paper bonds will be issued in your name or the name you designate as primary owner, co-owner or beneficiary. If you are married and filed a joint return, the bonds will be issued in yours and your spouse’s name. You can also designate a beneficiary or co-owner under this name registration option.
- You will receive the U.S. savings bonds in the mail.
- Buying bonds with your refund is easy. Just select this option by filing Form 8888, Allocation of Refund (Including Savings Bond Purchases).
- Form 8888 has step-by-step instructions on how to select this option and how to specify the amount of your refund you want to use to purchase savings bonds.
For more information about the U.S. Savings Bonds refund option visit the IRS website at http://www.irs.gov.