| Use Your Federal Tax Refund to Buy
Savings Bonds
IRS Tax Tip 2/1/11
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.
1. 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.
2. 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.
3. 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.
4. You will receive the U.S. savings bonds in the mail.
5. Buying bonds with your refund is easy. Just select this option by
filing Form 8888, Allocation of Refund (Including Savings Bond Purchases).
6. 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.
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