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Shortened training-for-vita-volunteers-5-8-14

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  • 1. Tax-Time Savings Bonds & Form 8888 Training for Tax Preparation Volunteers
  • 2. 2 We Know That Saving is Hard ‣ Challenges lower-income savers face: • Limited income – a minimum wage worker makes $15K a year. • Consumerism – pressure to buy is everywhere. • Family & friends – often in need, creating pressure to share resources. • Few opportunities – most people save with structured help (e.g., 401(k) plans), but poor people get little or no such help.
  • 3. 3 Bonds Make it Easy 1. Funds to Save - $100 Billion is returned to poor families each year ‣ Avg. of $1,680 per household, up to 20% of annual income 2. Assistance – tax preparers serve as a trusted adviser to promote saving 3. Convenience – bonds can be purchased during tax prep process without any extra steps or follow-up Assistance and guidance from a trusted tax preparer is a critical to helping tax clients save at tax time.
  • 4. 4 Purpose of This Presentation 1. Provide background on the Tax-Time Savings Bond policy 2. Explain Series I Savings Bonds 3. Train you to promote and process Series I Savings Bonds using Form 8888
  • 5. 5 Highlights of the Policy  Tax filers with refunds of at least $50 can purchase Series 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 filing jointly  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. 6 Policy is a Growing Success 0 10,000 20,000 30,000 40,000 50,000 2009 2010 2011 Number of People Impacted
  • 7. 7 Pop Quiz Which of the following are true about Series I U.S. Savings Bonds: A. They pay a competitive interest rate (1.94% 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 you need is the gift recipient's name.
  • 8. 8 Pop Quiz Which of the following are true about Series I U.S. Savings Bonds: A. They pay a competitive interest rate (1.94% 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 you need is the gift recipient's name. All of these statements are true except letter C. U.S. Savings Bonds can be redeemed at most banks and credit unions nationwide, not just where they were purchased.
  • 9. 9 And Another Quiz How long must savings bonds be held before they may be redeemed? A. 6 months B. 12 months C. 5 years D. They may be redeemed any time
  • 10. 10 And Another Quiz How long must savings bonds be held before they may be redeemed? A. 6 months B. 12 months C. 5 years D. They may be redeemed any time U.S. Savings Bonds must be held for at least 12 months before they may be redeemed.
  • 11. 11 John Q. Saver 123 Main Street Anywhere, WA 99000-0000 OR Jen Saver 123-45-6789 01 2009 FRB-MPLS 04-15-07 2 :C000090007 :04 000000000000 C000000000I Purchaser’s Social Security Number Owner’s Name & Address (Co-Owner Name, if any) Authentication Stamp Issue Date Example Savings Bond 11
  • 12. 12 Who is on each bond?
  • 13. 13 Main Features  Safe – protected by U.S. Gov’t & replaced if lost or stolen  Accessible – buy for as little as $50  Competitive – solid return (1.94%), no fees  Simple – sold at “face value” ($50 buys $50 bond), rate adjusts twice a year  Long-term – must be held for 1 year  Portable – can redeem at most banks and credit unions  Q: How many Americans currently hold Savings Bonds?  A: 55 Million. (That’s 1 in 6!)
  • 14. 14 Savings Bonds as Gifts Tax 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 gift recipient (no SSN) • Tax client & gift recipient will be listed on bond as co-owners • Either party can redeem bond In a 2008 study, 68% of buyers purchased savings bonds for others, mostly children & grandchildren 14
  • 15. 15 Bonds vs. Savings Accounts vs. CDs Typical Savings Account* Typical 1 Year Certificate of Deposit (CD)* Series I U.S. Savings Bond Rate of Return 0.56% 0.80% 1.94% Annual Fees $0 $0 $0 Minimum to Open $100 $1,000 $50 Requires Bank Account Yes Yes No Need to be banked Yes Yes No Chex Systems Review Yes Yes No May Buy as a Gift No No Yes *Source: National Average rates, www.bankrate.com
  • 16. 16 Your Role as a Volunteer 1. Explain opportunity – describe savings bonds & how they work 2. Seek decision – ask client if he or she wants to order bonds for himself or someone else 3. Process order – complete IRS Form 8888 Tax Preparers Matter In a 2007 study, 41% of tax clients who saved part of their refund decided to do so only after meeting with their tax preparer.
  • 17. 17 Volunteer Materials 1. Form 8888 Script and Guide – gives guidelines for what to say & how to process Form 8888 2. FAQ – “Knowledge is Power” 3. Client’s Refund Summary – For client to fill out while you process Form 8888
  • 18. 18 Form 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 grandson Shawn a beneficiary ‣ Taylor wants the remainder of the refund to be sent in the form of a check How should Form 8888 be completed?
  • 19. 19 $400 for daughter Tania $100 for self Grandson as beneficiary Remainder Total Refund
  • 20. 20  Everyone deserves the opportunity to decide for themselves.  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 will say YES unless you ask!  Respect everyone’s decision Remember…
  • 21. 21 The National Campaign ‣Goal: to increase low-income taxpayer savings through savings bonds ‣Social Media ‣ www.facebook.com/bondsmakeiteasy ‣ www.twitter.com/bondsmakeiteasy ‣ www.youtube.com/bondsmakeiteasy ‣Results to date ‣ More than 25% of 2010 bond buyers bought again in 2011 ‣ In 2011, 45,000 people impacted by savings bonds ‣ Goal is 100,000 people in 2012!
  • 22. 22 For more information: ‣ TreasuryDirect.gov – Official Information ‣ BondsMakeItEasy.org – Campaign website ‣ Preeti Mehta, pmehta@d2dfund.org, (617) 541-9065