|$25K Contest: Filers Save Tax Refund|
|Susanna Kim||Mar 3, 2013, 6:01 AM|
(Image credit: Getty Images)
A non-profit group hopes to encourage tax filers to save a portion of their tax refund through a contest for anyone who saves at least $50 in a savings bond or other savings vehicle.
Doorways to Dreams (D2D) Fund, a non-profit group based in Allston, Mass., and founded by a former Harvard Business School professor, Peter Tufano, is awarding $25,000 to a grand prize winner and 40 weekly drawing prizes of $250 each to those over age 18 who use Form 8888 when they file their taxes with the IRS and put at least $50 in a savings vehicle. After participants file their taxes, they must also register at www.saveyourrefund.com by April 15 to enter the contest.
D2D, whose mission is to strengthen the financial security and opportunity of low- and moderate-income consumers, is using funding from Capital One Bank's Investing for Good program, the Annie E. Casey foundation and other philanthropic sources for the contest.
Since the promotion launched Feb. 1, Timothy Flacke, executive director of D2D, said it has received hundreds of entries.
"The reason we're doing it is to shine a spotlight on this opportunity that savings represent," Flacke said.
Because many middle- and low-income tax filers receive large tax refunds this time of year, "it's the best time of year to try to save," he said.
On the contest's website, the stories of some of the weekly winners are highlighted, some of whom say that until the contest, they had not heard of the little-known IRS program that allows you to invest your tax refund in a savings vehicle.
"We know a lot of people don't understand an IRS infrastructure exists to have large refunds to an IRA, prepaid card and savings bond," Flacke said. "The idea is to shine a spotlight on this and to bring an element of fun."
President Obama announced the Tax Time Savings Bond plan in September 2009.
About 45,000 Americans have saved $11 million in U.S. savings bonds at tax time with a portion of their tax refund, with an average of $244 per family, according to D2D in 2011; and 73 percent of the 2011 users of the tax time savings bond policy had household incomes, or adjusted gross income, below $50,000.