Since the Treasury department stopped selling paper bonds in January 2012, the only way to get paper savings bonds is through your tax refund. This is easy when you are due a refund â“ all you have to do is fill out Form 8888 and indicate how much of your refund you’d like to go into Series I US Savings Bonds, from as little as $50 up to $5,000. But what if you’re not receiving a refund?
There is another way to purchase them at tax time when you actually owe money â“ that is, by overpaying your taxes. Prepare your tax return and find out how much you owe. Then file for an extension using Form 4868. On line 7 of the form, add how much you’d like to get in paper bonds on top of how much you owe. So if you owe $900 and you’d like to get $1000 worth of savings bonds, put $1,900 on this line. Put the amount of how much you’d like to get in paper bonds on line 68 of Form 4868 (Amount paid with request for extension to fileâ). Send your extension along with your tax payment to IRS and wait for a week or so until your check clears before filing your tax return.
When you file your taxes, fill out Form 8888 and put in that extra amount in the US Series I Savings Bonds section. You can buy paper bonds for yourself, or as gift to a loved one. Send in your forms, and wait for the paper bonds to arrive in the mail! If you earned below $57,000 in 2011, you can file online for free at MyFreeTaxes.com.
Gifting paper bonds to a loved one at tax time is one of the most convenient refund options and a great way to help a child learn how to save. You may have received these bonds as gifts from your parents in your childhood. Many Americans learned to save only after the federal government started the U.S. Savings Bond program in 1935. The program has since helped millions of Americans save for their dreams and pay for their first home, college education for themselves or their children, or retirement.
Paper bonds can also be an ideal option for the one in four Americans who have no bank accounts or underbanked as the bonds will be mailed to you, can be stored anywhere, and have no monthly fees unlike a savings account. With an excellent current interest rate of 3.06% that’s better than most savings accounts, what’s not to like? Get these with your tax refund while they are still available! And who knows, these bonds may become a collector’s item in the future.
For more information, visit Bonds Make It Easy.
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