The I Bond Thread

[Sunset]

From my quick research into Trusts, some States are easy to set up a revocable trust , others like IL are awkward to do due to the signature requirements.

For that reason I didn't form a Trust, and stuck with my 1 Entity and 1 personal account.

My current thinking on Entity accounts, is for me, to keep it, for a while, but when it becomes not valuable to cash in.
Worst case is I die suddenly early, and then it becomes part of my estate.
Probate in IL is something to avoid when possible.

 

[tulak]

Isn't it simpler to overpay the 2021 estimated taxes by about $5000 and buy a bond with the refund? Sure it's not the full $10,000, but you won't have the Feds knocking on your door either.

I've been on the fence with iBonds for a long time, but I think I'm going to give in and finally buy some. I'll probably never touch them unless SHTF, so no harm in starting now and let it grow over the next couple of decades.

I'm wondering about the 5k overpayment for taxes. Is it as easy as overpaying taxes - write a check to the IRS for 5k - and then apply the 5k refund for iBonds?

 

[aja8888]

I've been on the fence with iBonds for a long time, but I think I'm going to give in and finally buy some. I'll probably never touch them unless SHTF, so no harm in starting now and let it grow over the next couple of decades.

I'm wondering about the 5k overpayment for taxes. Is it as easy as overpaying taxes - write a check to the IRS for 5k - and then apply the 5k refund for iBonds?

If you estimate your taxes quarterly just send in a bigger check. Some folks pay taxes once at the end of the year and they can do the same.

 

[tulak]

If you estimate your taxes quarterly just send in a bigger check. Some folks pay taxes once at the end of the year and they can do the same.

I’m still working, so I don’t pay estimated taxes. Taxes are deducted from my paycheck. So this would be me sending the IRS an extra 5k solely for the purpose of using that money to buy iBonds with the tax refund.

Not sure if this is allowed by the IRS?

 

[USGrant1962]

I’m still working, so I don’t pay estimated taxes. Taxes are deducted from my paycheck. So this would be me sending the IRS an extra 5k solely for the purpose of using that money to buy iBonds with the tax refund.

Not sure if this is allowed by the IRS?

Sure it is as long as you call it estimated taxes. Go to IRS direct pay and select "Estimated Tax", "1040ES", and 2021.

 

[pb4uski]

I've been on the fence with iBonds for a long time, but I think I'm going to give in and finally buy some. I'll probably never touch them unless SHTF, so no harm in starting now and let it grow over the next couple of decades.

I'm wondering about the 5k overpayment for taxes. Is it as easy as overpaying taxes - write a check to the IRS for 5k - and then apply the 5k refund for iBonds?

+1 and I finally gave in an bought $20k ($10k each) in late October. My taxes are covered by federal tax withholding from my pension, so I'll make a $5k estimated payment in early January 2020 to provide the $5k overpayment needed for the paper i-bonds.

 

[jollystomper]

I've been on the fence with iBonds for a long time, but I think I'm going to give in and finally buy some. I'll probably never touch them unless SHTF, so no harm in starting now and let it grow over the next couple of decades

Yeah, this is what I did. I bought $10K back in May at that time most folks thought that would be the "peak" rate and it would likely drop in October . Now I've bought another $10K for DW, and will plan to buy $20K in January.

 

[misanman]

Has anyone had trouble getting approved for a Treasury Direct account? I applied online a couple of weeks ago and the account was on hold until I mailed in form FS 5444E. Had to have the signature guaranteed by the bank. I got an email notification a week ago that they had received the form but that the account wouldn't be available until it was processed.

To follow up - my account was approved today so I was able login and make purchases.

 

[mn54]

The problem with the tax refund bonds IMO is that they're paper. They're just a bother to deal with. First they come in the mail, and then you either have to safely store them, or send them back in to Treasury direct (again through the mail and hope/pray they get there).

I already have a stash of paper bonds, and I don't want to accumulate any more of them.

I was under the impression that you could enter your paper bonds online into your treasury direct account without having to mail them in.

 

[razztazz]

I was under the impression that you could enter your paper bonds online into your treasury direct account without having to mail them in.

This is how it worked for me 5 or 6 years ago when I converted my paper bonds. Type it in online then to the shredder with the paper specimens. I have not heard of any changes to this procedure

 

[pb4uski]

I don't know about the shredder part... when DS converted his paper EE savings bond received as a child to electronic we had to mail them in.

 

[razztazz]

I don't know about the shredder part... when DS converted his paper EE savings bond received as a child to electronic we had to mail them in.

They told me to simply destroy them. I did

 

[ychuck46]

Nope

Have had a Treasury Direct account for a number of years now. Never ran into a problem. Been buying I Bonds and redeeming old EE Bonds.

 

[dixter]

I could have sworn I told you all about this two years ago....

 

[BladeS.]

Opened a new account and linked it to my brokerage account fairly easily. Looking to purchase max amount of i-Bonds next week. One quick question since this is my first purchase through the Treasury website. Has anyone cashed out one of these yet and were you able to electronically transfer the funds back to your original funding account? Just want to confirm you don't have to physically cash these out at a bank when the time comes. I'm assuming you can transfer back electronically but want to be certain. (And yes, I'm aware of the initial 12 month restriction) Thanks!

 

[Dash man]

Opened a new account and linked it to my brokerage account fairly easily. Looking to purchase max amount of i-Bonds next week. One quick question since this is my first purchase through the Treasury website. Has anyone cashed out one of these yet and were you able to electronically transfer the funds back to your original funding account? Just want to confirm you don't have to physically cash these out at a bank when the time comes. I'm assuming you can transfer back electronically but want to be certain. (And yes, I'm aware of the initial 12 month restriction) Thanks!

Yes, you can transfer the money electronically.

 

[Fielding]

Thanks for this nudge.


I just did $10k apiece for self and spouse, $10k for one trust, will do another $10k for another trust later in year, and will try to remember to do $5k per return next year during tax season.

 

[Sunset]

This is how it worked for me 5 or 6 years ago when I converted my paper bonds. Type it in online then to the shredder with the paper specimens. I have not heard of any changes to this procedure

I'd be pretty nervous about shredding them, until I had checked many times over months that they still appeared on my account.

I'd imagine shredding them, and then finding they are not on the account

 

[razztazz]

I'd be pretty nervous about shredding them, until I had checked many times over months that they still appeared on my account.

I'd imagine shredding them, and then finding they are not on the account

HA! Yes I checked many many times. Eventually we need to learn to let go of these things. It took 30 years to convince myself I wouldn't need all those cancelled checks and electric bills from the 70's and 80's I had been sitting on. I burned out 3 shredders in one weekend. You can bet I checked. Then checked again. Then.... I let gooooo....

 

[aja8888]

HA! Yes I checked many many times. Eventually we need to learn to let go of these things. It took 30 years to convince myself I wouldn't need all those cancelled checks and electric bills from the 70's and 80's I had been sitting on. I burned out 3 shredders in one weekend. You can bet I checked. Then checked again. Then.... I let gooooo....

Heck if I shredded all those old paper records, what would my kids have to throw away when they come to "pick over" the remains?

 

[dixter]

don't forget these are taxable income.... so the yld probably isn't what you think it is...

 

[4legsgood]

Are people who are planning on getting I-bond tax refund sure they'll get the juicy November rate and not the unknown May rate? My direct deposit cash refund came after May last year.

 

[Mulligan]

If that's the case that they don't seem to enforce it then I suppose that you could have skipped the joint account and just bought more that $10k in each of your individual accounts.

I wonder what they would do if we each bought $200k of i-bonds but only did it one time?

PB, Had a friend who screwed up and put 20k under his name, while attempting to split with wife. He got the email and he decided to call them. Rep said it usually is allowed a one time “screw up”. Second offense it would be sent back or possibly even account closed.

 

[Mulligan]

don't forget these are taxable income.... so the yld probably isn't what you think it is...

Its Federally taxable when you redeem, otherwise its deferred. Its state income tax exempt.

 

[tulak]

Are people who are planning on getting I-bond tax refund sure they'll get the juicy November rate and not the unknown May rate? My direct deposit cash refund came after May last year.

I don’t care if I miss out. I’m planning on holding these as part of my FI allocation long-term. Looking (briefly) at historical performance, I expect iBonds to do as well as any other fixed income investment, even if (when) the rates drop.