Posts Tagged "bonds"

IRS suggests using tax refund for bonds

Posted on May 6, 2014

If you’re receiving a tax refund this year, the IRS reminds you that you can use it to buy U.S. savings bonds directly from the IRS. Here are the details. * You may purchase up to $5,000 in U.S. Series I savings bonds. * The total amount of bonds you purchase must be a multiple of $50. Any refund over the specified bond purchase amount can be deposited in your bank savings account, or you can request a check by mail. * Bonds will be issued in your name. If you’re married and file a joint return, the bonds will be issued in the names of both spouses. * The bonds will be sent to you by mail. * You select this option when filing your 2013 return by using Form 8888, “Direct Deposit of Refund to More Than One Account.” * Form 8888 gives instructions on selecting this option and specifying the amount of refund you want to use to buy savings bonds. For additional information about Series I savings bonds, go to www.treasurydirect.gov. Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+ <https://plus.google.com/108764776146415485651/posts> , LinkedIn <http://www.linkedin.com/in/gillilandcpa> , Facebook <https://www.facebook.com/gillilandcpa> , and Twitter...

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Build America bonds: Some important facts

Posted on Oct 15, 2010

When you think of municipal bonds you probably also think of tax-exempt interest income. But did you know some municipal bonds generate taxable income? Build America bonds, created in 2009 as part of the stimulus bill, are an example of this type of municipal bond. Like other muni’s, build America bonds are issued by state and local governments to fund construction projects. However, because the federal government offers tax credits for build America bonds, the interest you receive is taxable.  Why invest in a taxable municipal bond? The idea is that the federal tax credit reduces the cost of the bond to the state or local government, which in turn can increase the interest rate. In addition, when you buy bonds issued by the state where you live, the interest is generally free from state income tax. How does the credit work? The municipality issuing the bond can choose to receive the credit itself. These “direct payment” bonds are similar to regular taxable bonds. You get your interest payment in cash and report it on your income tax return.  Alternatively, the municipality can issue “tax credit” bonds. When you invest in this kind of build America bond, you apply for a credit on your federal income tax return of 35% of the net interest you receive. Both the interest and the credit are included in your gross income.  The credit reduces your tax liability dollar for dollar and can be applied against the alternative minimum tax. You can carry any unused amount to future returns.  Depending on your tax bracket, build America bonds may be a sensible addition to your portfolio. Please call if you would like more...

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