Are Savings Bond payroll deductions pre-tax?

Friday, February 4th, 2005
Categorized as: Buying US Savings BondsSavings Bond taxes

If you purchase bonds through payroll deduction at work can the deductions be taken pre-tax?

Tom’s response

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.

Rate this post (1 to 5 stars):  1 Star2 Stars3 Stars4 Stars5 Stars
(Average rating: 4.50 stars)

FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

No comments yet.

Comments Closed

June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

Savings Bond Calculator


Savings Bond

Get an answer to your questions from the Treasury's Savings Bonds team.

Click below to ask a question.

Ask the Treasury


Invest online in Savings Bonds or
marketable Treasury securities.

Deal directly with the U.S. Treasury.

More info


Log in