Training for VITA Volunteers
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  • Main point: Form 8888 is pretty easy to fill out. We will demonstrate with an example.
  • $400 is for her daughter Tania $100 is for herself, with her grandson Shawn as beneficiary The remainder of the refund ($200) will be sent to her as a check

Transcript

  • 1. Tax-Time Savings Bonds &Form 8888Training forTax Preparation Volunteers
  • 2. 2We Know That Saving is Hard‣ Challenges lower-income savers face:• Limited income – a minimum wage worker makes $15K ayear.• Consumerism – pressure to buy is everywhere.• Family & friends – often in need, creating pressure toshare resources.• Few opportunities – most people save with structuredhelp (e.g., 401(k) plans), but poor people get little or nosuch help.
  • 3. 3Bonds Make it Easy1. Funds to Save - $100 Billion is returnedto poor families each year‣ Avg. of $1,680 per household, up to 20% of annualincome1. Assistance – tax preparers serve as atrusted adviser to promote saving2. Convenience – bonds can bepurchased during tax prep processwithout any extra steps or follow-upAssistance and guidancefrom a trusted taxpreparer is a critical tohelping tax clients save attax time.
  • 4. 4Purpose of This Presentation1. Provide background on the Tax-TimeSavings Bond policy2. Explain Series I Savings Bonds3. Train you to promote and process SeriesI Savings Bonds using Form 8888
  • 5. 5Highlights of the Policy Tax filers with refunds of at least $50 can purchaseSeries I U.S. Savings Bonds on the tax return Use IRS Form 8888 to place order Filers may buy bonds for themselves and spouse if filingjointly Filers may buy bonds for two other people as gifts Bonds are mailed in 3-5 weeks Must be purchased in multiples of $50 $50 minimum, $5,000 maximum
  • 6. 6Policy is a Growing Success
  • 7. 7Pop QuizWhich of the following are true about Series I U.S. SavingsBonds:A. They pay a competitive interest rate (1.18% currently).B. They can be purchased for as little as $50.C. They can only be redeemed where they were purchased.D. They can be purchased as gifts for anyone else – all youneed is the gift recipients name.
  • 8. 8Pop QuizWhich of the following are true about Series I U.S. SavingsBonds:A. They pay a competitive interest rate (1.18% currently).B. They can be purchased for as little as $50.C. They can only be redeemed where they were purchased.D. They can be purchased as gifts for anyone else – all youneed is the gift recipients name.All of these statements are true except letter C.U.S. Savings Bonds can be redeemed at most banksand credit unions nationwide, not just where they werepurchased.
  • 9. 9And Another QuizHow long must savings bonds be heldbefore they may be redeemed?A. 6 monthsB. 12 monthsC. 5 yearsD. They may be redeemed any time
  • 10. 10And Another QuizHow long must savings bonds be heldbefore they may be redeemed?A. 6 monthsB. 12 monthsC. 5 yearsD. They may be redeemed any timeU.S. Savings Bonds must be held for at least 12months before they may be redeemed.
  • 11. 11John Q. Saver123 Main StreetAnywhere, WA 99000-0000OR Jen Saver123-45-6789 01 2009FRB-MPLS04-15-072:C000090007 :04 000000000000 C000000000IPurchaser’s Social Security NumberOwner’s Name & Address (Co-Owner Name, if any)Authentication StampIssue DateExample Savings Bond11
  • 12. 12Who is on each bond?
  • 13. 13Main FeaturesSafe – protected by U.S. Gov’t &replaced if lost or stolenAccessible – buy for as little as $50Competitive – solid return (1.18%),no feesSimple – sold at “face value” ($50buys $50 bond), rate adjusts twice ayearLong-term – must be held for 1 yearPortable – can redeem at mostbanks and credit unions Q: How manyAmericanscurrently holdSavings Bonds? A: 55 Million.(That’s 1 in 6!)
  • 14. 14Savings Bonds as GiftsTax Clients can buy bonds for:• Themselves• And/or up to two other people• e.g., kids, grandkids, spouses, nieces /nephews, godchildren, etc.Details• Tax client needs only name of giftrecipient (no SSN)• Tax client & gift recipient will be listed onbond as co-owners• Either party can redeem bondIn a 2008 study, 68% ofbuyers purchasedsavings bonds forothers, mostly children& grandchildren14
  • 15. 15Bonds vs. Savings Accounts vs. CDsTypical SavingsAccount*Typical 1 YearCertificate ofDeposit (CD)*Series I U.S.Savings BondRate of Return 0.56% 0.80% 1.18%Annual Fees $0 $0 $0Minimum to Open $100 $1,000 $50Requires BankAccountYes Yes NoNeed to be banked Yes Yes NoChex Systems Review Yes Yes NoMay Buy as a Gift No No Yes*Source: National Average rates, www.bankrate.com
  • 16. 16Your Role as a Volunteer1. Explain opportunity –describe savings bonds & howthey work2. Seek decision – ask client if heor she wants to order bonds forhimself or someone else3. Process order – complete IRSForm 8888Tax Preparers MatterIn a 2007 study, 41% oftax clients who savedpart of their refunddecided to do so onlyafter meeting with theirtax preparer.
  • 17. 17Volunteer Materials1. Form 8888 Script and Guide – givesguidelines for what to say & how to processForm 88882. FAQ – “Knowledge is Power”3. Client’s Refund Summary – For client to fillout while you process Form 8888
  • 18. 18Form 8888 Example‣ Taylor Knowles is getting a $700 refund‣ She wants to purchase:‣ $400 worth of bonds for her daughter, Tania Knowles‣ $100 worth of bonds for herself and to make grandsonShawn a beneficiary‣ Taylor wants the remainder of the refund to besent in the form of a checkHow should Form 8888 be completed?
  • 19. 19$400 fordaughter Tania$100 for selfGrandson as beneficiaryRemainderTotal Refund
  • 20. 20 Everyone deserves the opportunity to decide forthemselves. This may be a client’s best saving opportunity all year. You will get a lot of No’s, BUT you don’t know who willsay YES unless you ask! Respect everyone’s decisionRemember…
  • 21. 21The National Campaign‣ Goal: to increase low-incometaxpayer savings throughsavings bonds‣ Social Media‣ www.facebook.com/bondsmakeiteasy‣ www.twitter.com/bondsmakeiteasy‣ www.youtube.com/bondsmakeiteasy‣ Results to date‣ More than 25% of 2010 bondbuyers bought again in 2011‣ In 2011, 45,000 people impactedby savings bonds‣ Goal is 100,000 people in 2012!
  • 22. 22For more information:‣ TreasuryDirect.gov – Official Information‣ BondsMakeItEasy.org – Campaign website‣ Preeti Mehta, pmehta@d2dfund.org, (617) 541-9065