H&R Block will be among the tax preparation businesses that will be taking advantage of a new IRS initiative aimed at helping taxpayers build their nest eggs by allocating a portion of their tax refund toward the purchase of U.S. savings bonds.
President Obama announced the initiative in September (see
Block, the largest tax prep chain in the U.S., announced last week that it plans to support the initiative this coming tax season. The option will be available at all of H&R Blocks 13,000 offices as well as through the H&R Block At Home and Best of Both online and tax software. The company recently announced that it was renaming its TaxCut software as H&R Block At Home for the upcoming tax season.
Beginning with the 2009 tax return, tax refunds can be used to purchase Series I U.S. Savings Bonds by completing the appropriate sections of the tax return, according to Block. Savings bonds will be mailed to taxpayers who choose this option in denominations of $50, $100, $200, $500 and $1,000. The bonds must be held for one year.
While there is no penalty for cashing the bond after five years, if cashed out sooner, the last three months' interest will be forfeited. Bonds will accrue interest for up to 30 years, are adjusted semi-annually for inflation, and pay compound interest. The current rate is 3.36 percent. A feature to add co-owners to the bond will become available in 2011.