Money Matters

Money Matters: A tax refund savings program you should know about

CorrespondentMarch 29, 2014 

A program was brought to my attention this week, and even though I hate to reward procrastinators, I’m going to write about it anyway. Knowledge of the program may encourage those who have not yet filed their taxes and are expecting a refund to save a portion of the refund. If you’ve already filed for 2013 and usually get a refund, keep this program in mind when you file for tax year 2014. The program is called SaveYourRefund, and it was created by the nonprofit Doorways to Dreams (D2D) Fund.

I spoke with Preeti Mehta, director of project incubation for the D2D Fund, and she said the program is in its second year and is targeted to low and intermediate income taxpayers but is open to any of the more than 100 million expecting a tax refund. The major sponsors of the SaveYourRefund program are Ford Foundation, Intuit, Capital One Investing for Good and The Annie E. Casey Foundation. There is no cost to enter, and if you direct at least $50 of your tax refund directly into an IRA, bond or personal savings account, you have a chance to win cash prizes.

Cash prizes

This year, 10 cash prizes worth $100 each are being given away weekly, and the grand prize of $25,000 is to be awarded at the end of April. To qualify for the grand prize, you must have submitted the form for the chance to win the weekly prizes and then submit the form for the grand prize. You will need a photo that represents your savings goal or motivation and a caption of up to 140 words may accompany the photo. To learn more and enter the contest, go to https://www.saveyourrefund.com/home.

To learn more about the D2D Fund organization, go to www.d2dfund.org.

IRS Form 8888 is the form to use to request direct deposit of your tax refund into multiple accounts. You can direct your refund to various types of accounts, such as checking, savings, IRA accounts, Archer Medical Savings Accounts, Coverdell Education Savings Accounts and Treasury Direct online accounts. To buy savings bonds through Treasury Direct, you must open an account at www.treasurydirect.gov before requesting this deposit option. You can also request that up to $5,000 of your refund be used to buy paper Series I savings bonds. The minimum bond purchase allowed is $50 and in multiples of $50 up to a maximum of $5,000 or the amount of your refund, whichever is less.

Paper bonds

You’ll need account numbers and routing numbers for checking and savings accounts to complete Part I of Form 8888. To the right of each account, specify the amount of your refund to be deposited in each account. If you are directing a portion of your refund to a Treasury Direct Account, enter the account number in Part I and check the savings box for account type. Part I is also where you’d list account numbers for other types of accounts; you need to contact the institution and make sure it will accept the direct payment and, if so, the routing and account numbers.

It’s too late to direct any portion of your refund to fund a 2013 IRA because the money has to be in your account on or before April 15.

Part II is used to purchase paper bonds. You can purchase bonds for yourself, your spouse (if filing jointly) or for someone else. Part III is used if after the deposits made in Parts I & II you have a remaining refund for which you would like to receive a check.

Holly Nicholson is a certified financial planner in Raleigh. She cannot answer every question. Reach her at askholly.com or P.O. Box 97128, Raleigh, NC 27624

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