Are Savings Bond payroll deductions pre-tax?
Friday, February 4th, 2005
Categorized as: Savings Bond taxes • Buying US Savings Bonds
If you purchase bonds through payroll deduction at work can the deductions be taken pre-tax?
Wouldn’t it be nice if the amounts you invest in Savings Bonds through a payroll savings plan could be deducted from your income for tax purposes.
As you know, other payroll deductions, such as retirement fund and traditional IRA investments, have this benefit.
However, Savings Bonds don’t. Savings Bond investments are always after-tax, even when purchased through payroll deduction.
They do have the same tax-deferral feature as retirement funds and traditional IRAs, but that applies to the earnings, not the original investment.