Treasury Services

New method to boost retirement savings

December 15, 2009

Now there are two ways to put your tax refund to work by investing in Treasury securities. The first way, which has been around for the past few tax years, allows you to deposit part or all of your tax refund into your TreasuryDirect_® account.

In his Labor Day weekend radio address, President Obama announced a second way to use your tax refund to help boost retirement savings. Starting in 2010, the U.S. Treasury Department will offer taxpayers the option to buy paper Series I savings bonds using their tax refund. By filling out IRS Form 8888, taxpayers can instruct the Internal Revenue Service (IRS) (Off-site Link) to use their refund to buy up to $5,000 in savings bonds in multiples of $50. If they wish to use all of their refund, and it is divisible by 50, taxpayers can simply use Form 1040. The bonds will be issued in the name or names on the return.

With the new purchase option, a TreasuryDirect account is not needed. The instructions for Form 8888 provide the routing transit number (0437-3688-1) and the account number (the word “BONDS”) for entry on the appropriate lines.

After the IRS receives the tax return, the Series I savings bonds will be issued and mailed to requesting taxpayers by the Federal Reserve within 15 business days. Taxpayers who do not receive their bonds within this time frame should first check online with the IRS about the status of their refund (Off-site Link), or call (800) 829-1954. If the refund has been processed and the order for the savings bonds has been placed, the taxpayer will need to contact the Pittsburgh Treasury Retail Securities Site at (800) 245-2804 for assistance.

This new purchase option is possible through the combined efforts of the Treasury Department and the Federal Reserve. More information is available online about using your income tax refund to save by buying U.S. savings bonds (Off-site Link). Alternatively, taxpayers can check their tax preparation software or contact their tax preparer.

 

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