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Old 06-30-2022, 10:17 AM
 
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I read an article where in the entire calendar year of 2020, 364 million dollars of I Bonds were purchased.

In the first 6 months of 2022, 17.5 billion dollars of I bonds were purchased. That’s a huge difference!

I bought in last month for 10K, and then I will buy 10K more in January.

Disappointing that you can only do 10K per year, although has anyone ever purchased the extra $5K with their tax refund? How does that work? Can you only buy whatever your refund is, or can you pay out the difference to get it up to 5K?

Also, will you see the balance on Treasury Direct, or is it a paper bond only? That’s a little confusing to me when I read about it. Do they just call it “paper bond” but it’s not really on paper, just on your TD account?

Many years ago, I had paper bonds, but I cashed those out years ago at near maturity so I could invest it elsewhere. Recently, I’ve started with Treasury Direct, so when you buy a bond, there is no paper copy like years ago,
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Old 06-30-2022, 10:22 AM
 
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I sent the IRS money in December that I figured would be at least $5,000 over what I owed on my taxes. When they ask you “how do you want your refund” I Bonds is one of the choices. You can only purchase with your refund.
They send you paper bonds and you have to convert them to electronic. It’s quite an ordeal.
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Old 06-30-2022, 10:34 AM
 
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Quote:
Originally Posted by organic_donna View Post
I sent the IRS money in December that I figured would be at least $5,000 over what I owed on my taxes. When they ask you “how do you want your refund” I Bonds is one of the choices. You can only purchase with your refund.
They send you paper bonds and you have to convert them to electronic. It’s quite an ordeal.
That’s a little different than my situation. I always take the foreign income exclusion, which you are allowed to but only up to 112K, but anyway, once I exclude that, plus I zero out my most of my tax deductions anyway, so my refund is usually not over 5K.

But when I do my taxes on the software, I will get the notification screen that I have a refund coming, but I’ve never clicked on the bond option. Are you saying it will likely give me the option to perhaps add 3K to my 2K refund?

But interesting that they do send you a paper bond. Just curious, but what is the “ordeal” to move it over to the Treasury Direct website? Just trying to get some concise answers before verifying it all on the website anyway.
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Old 06-30-2022, 12:13 PM
 
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Originally Posted by WK91 View Post
That’s a little different than my situation. I always take the foreign income exclusion, which you are allowed to but only up to 112K, but anyway, once I exclude that, plus I zero out my most of my tax deductions anyway, so my refund is usually not over 5K.

But when I do my taxes on the software, I will get the notification screen that I have a refund coming, but I’ve never clicked on the bond option. Are you saying it will likely give me the option to perhaps add 3K to my 2K refund?

But interesting that they do send you a paper bond. Just curious, but what is the “ordeal” to move it over to the Treasury Direct website? Just trying to get some concise answers before verifying it all on the website anyway.
If your refund is expected to be for example $2,000, you would send the IRS and extra $3,000, and conversely if you owed $2,000, you would sent them $7,000. Either scenario, you end up with $5,000 extra to buy the bonds.
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Old 06-30-2022, 12:46 PM
 
Location: Omaha, Nebraska
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My understanding is that if you buy on the TreasuryDirect website, you'll receive electronic bonds which are stored on the TreasuryDirect website (but pay out interest to the bank account you linked your TreasuryDirect account to). if you buy via a tax refund, you'll receive a paper bond. You can move the paper bond to the TreasuryDirect account, but apparently it's a hassle to do so, as the website is not very user friendly.
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Old 06-30-2022, 12:52 PM
 
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Originally Posted by Aredhel View Post
My understanding is that if you buy on the TreasuryDirect website, you'll receive electronic bonds which are stored on the TreasuryDirect website (but pay out interest to the bank account you linked your TreasuryDirect account to). if you buy via a tax refund, you'll receive a paper bond. You can move the paper bond to the TreasuryDirect account, but apparently it's a hassle to do so, as the website is not very user friendly.
I received about 20 paper bonds in different denominations. I had to input the numbers and amount of each bond on the website. That took a while. Then I had to mail in the paper bonds to have them converted. It was an ordeal.
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Old 06-30-2022, 01:23 PM
 
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Quote:
Originally Posted by Aredhel View Post
My understanding is that if you buy on the TreasuryDirect website, you'll receive electronic bonds which are stored on the TreasuryDirect website (but pay out interest to the bank account you linked your TreasuryDirect account to). if you buy via a tax refund, you'll receive a paper bond. You can move the paper bond to the TreasuryDirect account, but apparently it's a hassle to do so, as the website is not very user friendly.
The interest is credited to increase the value of the bond each month, it is not paid out to the bank account. Upon redemption proceeds are paid.
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Old 06-30-2022, 01:52 PM
 
Location: USA
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And a reminder, you can declare the interest as income as accrued or upon redemption.
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Old 06-30-2022, 04:39 PM
 
Location: Baltimore, MD
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Quote:
Originally Posted by organic_donna View Post
I received about 20 paper bonds in different denominations. I had to input the numbers and amount of each bond on the website. That took a while. Then I had to mail in the paper bonds to have them converted. It was an ordeal.
Just to be clear, you don't HAVE to record the paper bonds on the website. You can choose to keep them in paper form.
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Old 06-30-2022, 05:59 PM
 
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You can actually buy up to $15k worth of paper I bonds with your tax refund, but the owners of the bonds must be three different people: you, your spouse, and a gift recipient who is most likely a child.

Edit: looks like you are limited to $5000 per tax return via form 8888, but each spouse can purchase $10k of I bonds for each child, since that falls below the individual gift limit and the $10k annual limit on I bonds applies to the owner not the purchaser.

Last edited by Avondalist; 06-30-2022 at 06:14 PM.. Reason: Correction
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