Our Services
The Founders
Speaking Engagements
News & Information
Financial Briefs
Articles Of Interest
Featured News
Market Data Bank
Stock Quotes
Problem Solvers
Client Forms
Helpful Websites
Contact Us
Directions
Home
More Articles  Printer Friendly Version

 

Weigh All Factors For Bank Account Sign-Up Bonuses

Have you seen the ads promising a cash reward for opening a new bank account? You may be offered a bonus of $100 or more just for signing up. But be aware that strings are attached.

For starters, promotional giveaways, awards, and prizes are subject to federal and possibly state and local income tax. This applies to everything from bank deposit offers to lottery winnings to cash prizes that accompany Oscar and Grammy awards. (Recent legislation exempts Olympic medal winners from tax.) You'll receive a Form 1099-MISC and must report the income on your tax return.

In other words, if you get $100 from a bank and you're in the 25% tax bracket, you'll owe Uncle Sam $25 on your sign-up bonus.

Consider these other potential drawbacks:

  • You may be charged fees relating to the account. For example, if your balance dips below a minimum amount you might be assessed a monthly fee that eventually could wipe out your one-time bonus.
  • Some banks require direct deposit enrollment before you receive the bonus. If you don't comply within a specified time, you might not receive the bonus at all.
  • The bonus may be rescinded if the account isn't kept open for a specified period of time.

Bottom line: Sign up for an offer only if it otherwise makes sense for you.


Email this article to a friend


Index
How Now, Dow Jones Industrials?
Five Steps When You Inherit Assets
Getting A High Tax Grade For Higher Education Credits
Five Retirement Questions To Answer
Q's And A's About Financial Aid
One Last Shot At A Tax Exemption
Taking Socially Responsible Investing To The Next Level
How You Can Manage Risk Aversion
Don't Be Caught Red-Handed By The Wash Sale Rule
When To Disclaim An Inherited IRA
Trust As IRA Beneficiary: Not Crazy
Tax Reform Outlook: Cloudy, With A Chance Of A Law
Sowing Tax Seeds For Capital Gains
Grandparents Can Become Big Spenders For Their Offspring
Sticking With The Fundamentals
What Would Estate Tax Repeal Mean?

This article was written by a professional financial journalist for The Dover Group and is not intended as legal or investment advice.

©2017 Advisor Products Inc. All Rights Reserved.
Financial planning provided by Williams Advisory Services, LLC, a Registered Investment Adviser.
This message is intended for the use of the person(s) to whom it is addressed.
It may contain information that is privileged, confidential, proprietary, and/or exempt from disclosure under applicable law