Monday, March 8, 2010
The year 2009 income tax return will be the first time that taxpayers will be able to use their income tax refund to purchase up to $5000 in low-risk, liquid Treasury I Bonds. The Treasury Bonds pay interest and help protect the investor against inflation.
The bonds are issued in the taxpayer's name and if it is a refund from a joint return, the refund is issued in the names of both taxpayers. There are no beneficiaries to the bonds. You can purchase the bonds even if you do not have a TreasuryDirect account.
You simply use Form 8888 and enter the routing number 043736881 and check the box marked, savings. Use BONDS as your account number.
I Bond requests are done in multiples of fifty and the IRS will need a direct deposit routing number for the balance of your refund. If you have a $500 refund and you request $250 in I Bonds, the IRS needs to know where to send the rest of your money.
If the refund happens to be an exact multiple of fifty, the taxpayer can indicate that all of the refund be used for I Bonds. This is done by filling out the direct deposit information on your income tax return, and not filing Form 8888.
Taxpayers receive their Treasury Bonds through the mail.
If there is an error on an income tax return, in regard to calculating a refund, bonds will not be purchased. Bonds will also not be issued if the refund is offset, or the request is not made in multiples of fifty. When this happens, the purchase is canceled and all of the tax refund is issued through the mail.
When a taxpayer requests bonds, they can track them, after they have received the balance of the refund, by visiting the Treasury Retail Securities site.
Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. His famous Tax eBook "Stop donating your money to IRS" which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax. Just visit his website http://www.planningyourtax.com/ and claim your FREE eBook
Article Source: http://EzineArticles.com/?expert=Chintamani_Abhyankar
