US Savings Bonds

Archive for August, 2006

Negotiate the interest reporting of US Savings Bonds before the completion of divorce settlement

Many divorce settlements cost divorcees a lot of unnecessary tax dollars because they fail to negotiated the interest on the US Savings Bonds properly. In many cases, the parties responsible for paying taxes on the US Savings Bonds they no longer have are not even aware that they have to pay taxes on the Us Savings Bonds.

If you are awarded US Savings Bonds in your divorce decree

If you are awarded US sayings bonds in your divorce decree as part of your divorce settlement, be sure to watch out for the followings.

The accrued interest on the US Savings Bonds that have not been reported as income up to the time of divorce

If half of the US Savings Bonds are in your former spouse’ s name first with you as the co owner of the US Savings Bonds and the other half of the US Savings Bonds are in your former spouse’s name alone.

Removing your former spouse ’s name from the US Savings Bonds

When you receive the Us Savings Bonds, change the Us Savings Bonds title to your name, removing your former spouse’ s name from the Us Savings Bonds altogether.

Claim principal ownership

Then you claim that you were the principal co owner of the Us Savings Bonds even though you were named second on the Us Savings Bonds title and the Us Savings Bonds were retitled without a taxable event.

Taxation of Us Savings Bonds in divorce

The Us Savings Bonds that were in your former spouse’s name alone were retitled to your name and a 1099-INT was issued to your former spouse for all the interest earned on those Us Savings Bonds up to the point of the divorce.

Question: What are some good investments with $10,000?

Savings Bonds, savings accounts, maybe looking at some things with higher interest, do not know much about bonds other than very basics. Short and medium term. Around a year.

Answer: Hello,

I had the same problem as you, a good amount of money, but no idea where to put it.
Until my brother in law put me in contact with his moneymanager.
In the months they have been mannaging my account we build up a verry good and professional relationship (It’s important to me)
But my results have also been growing rather spectaculary.
Here you can see the results that have been made so far:

http://greenbackinvestor.blogspot.com/

If you want I can bring you in direct contact with my moneymanager?
(my email adress is on my blog).

Bond Investing : How Does Investing in Bonds Work?

Question: Scholarship Tax?

I have read in the IRS website and in other information that I have recieved that if you have been awarded a scholarship it is taxable if you use it for more than just tuition and fees. I have a scholarship that I was planning on using for some of my room and board. Is the scholarship suject to state taxes? And are there any educational savings accounts/bonds that I could put the extra scholarship money that would allow it to be exempt for federal/state tax? (I will be working this summer so my income will already exceed the standard deduction and personal exemption at the federal level)
The most important question is: is this suject to state tax, and if so, which state my resident state– My resident state or the one where I will be going to school.

Answer: Your most important question is able to be answered parallel to whether you should start an educational saving account:

You should weigh starting a business after you get out of school. If your mind is made up to work for someone else after you graduate, an educational savings account is one option if you plan to get married and feel you will not be able to send your children to college without some sort of “forced savings”.

If you provide over 50% of your support, the IRS will allow you to knock 3450 off of your gross income for 2008. You will also be able to take 5550 if you do not itemize your deductions. that may be enough to knock your gross income down to zero or nearly zero.

The scholarship money may be used for tuition and fees, room and board, valid lab fees and a few other charges. If you use any of the money for other things, you will have to add it to income. The scholarship will be subject to state income tax as state income tax begins with your Federal adjusted gross income {FAGI}. New Hampshire and Tennessee are the only exceptions {long story}.

All states have standard deduction, itemized deductions and exemptions. Your state income tax liability will be less than the Federal in your situation.

If both states have income tax, you will most likely have tax withheld by the state that you work in, unless you drive from your home state to work in another state on your summer job. In the unlikely event that two states withhold tax from you when you work at school, you will be able to get full credit from the state in which the university is not in. California is the only exception I know of.

Bond Investing : How Do Tax-Exempt Bonds Work?