Use your Tax Refund to Buy Savings Bonds

Did you know you could purchase Savings Bonds with your Tax Refund?

The option to purchase savings bonds via tax refund, for yourself or another person became available in 2010.

This is a great gift to your children, grandchildren, nieces or nephews.  The bonds will be mailed to your address with the beneficiary’s name on the bond.

Do I have to use all of my refund to purchase bonds?

  • You can use all or part of your tax refund to purchase I bonds.
  • Your request for bonds must be in increments of $50.
  • Any remaining refund amount not used to purchase bonds will be mailed to you as a paper check or you may elect to have the remaining amount directly deposited into a checking or savings account.

Can I buy savings bonds for a child, grandchild or someone else using this tax refund method?

  • Yes. You can use your refund to buy savings bonds and designate ownership or co-ownership for someone else, such as a child, grandchild or anyone, or elect a beneficiary using form 8888.

Benefits of Savings Bond (read in link): https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

Calculate the Value of Savings Bonds (select link):  https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

 

If you are a client and interested in purchasing Savings Bonds this upcoming tax season, let us know or contact our office at 508.203.1676.


  1. https://www.irs.gov/refunds/using-your-income-tax-refund-to-save-by-buying-us-savings-bonds
  2. https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

 

What is an Enrolled Agent (EA)?

An Enrolled Agent (EA) is a tax expert that can handle the same issues as a Certified Public Accountant (CPA) or Tax Attorney, when it comes to representation before the Internal Revenue Service (IRS).

“EA’s tend to focus on preparing taxes, and many specialize in tax resolution.  An EA is authorized by the U.S. Department of the Treasury to represent taxpayers before the IRS for audits, collections, and appeals.” – Kulp, Kayleigh. “EA vs. CPA: Which is Right for You?” Fox Business. Fox Business, 26 Mar. 2012. Web. 6 July 2017.

While a CPA may perform many accounting and financial services, some may not specialize in taxation.

An Enrolled Agent is a federally authorized tax practitioner who may also handle many state tax issues with a duly authorized Power of Attorney.  See our blog on “Why do I need a Power of Attorney?”

Like CPAs, Enrolled Agents must maintain a certain number of hours of continuing education to maintain their license.

There are factors to consider when determining which licensed tax professional to hire.

https://www.irs.gov/tax-professionals/enrolled-agents/enrolled-agent-information

To learn more about my professional credential, as an EA, and experiences select the link below.

Shanikwa Davis, EA, MST

Principal Owner @ S. Davis Tax Consultants

What is a 529 Plan and those Savings Accounts You Discussed?

A 529 Plan & Coverdell ESA offers options to put away cash in an investment vehicle that can grow tax-deferred and ultimately be distributed tax-free as long as they are used for what is considered qualified education expenses.

Coverdell, though it has more contribution limits, is less restrictive in terms of qualified expenses, especially for K-12. [Whereas the 529 Plans can only be used for K-12 tuition.]The $2000 annual contributions allowed are subject to income limits, depending on filing status (Single $110,000 and MFJ $220,000).
529 Plans are broader in functionality and deductions are available on the state income tax return.

How to Save for Your Child’s College Tuition? – NECN 08/27/2019
Select link to see video

Each state administers the plans, sets the deductible amounts and totals that can be contributed for a beneficiary.


Contributions for both plans are counted when considering gift tax implications. (2019 – $15,000 or split with spouse $30,000)

For 2019:
Massachusetts residents are eligible for deduction of $1000 ($2000 MFJ)

Aggregate contributions: $400,000

Rhode Island residents are eligible for deduction of $500 ($1000 MFJ)

Aggregate contributions: $395,000

Connecticut residents are eligible for deduction of $5,000 ($10,000 MFJ)

Aggregate contributions: $300,000


**Consult your tax advisor for specific questions.**

Speaking Engagements

 

family.jpgShanikwa has been a guest presenter and speaker for higher education institutions, business meeting, conferences, and community based organizations over the last five years.

You may schedule or submit a booking request by emailing admin@sdavistax.com to discuss availability and all the details of your event.