The I Bond Thread

[Sunset]

Sorry if this has been asked before, but...

I'm new to I bonds and having just purchased 20k, I am wondering if there is a special selection on treasury direct to indicate that I wish to defer taxes on all interest until the bond is redeemed or is that just assumed by the irs?

If you purchased 20K in 1 name only, you will get an email as the limit is 10K. [-]Reportedly they will let it slide this one time.[/-] <edited> See few comments below this may not be true anymore, I didn't try it as not worth the hassle.

You have a choice of reporting the interest: every year or at the end:

" When must I report the interest on my tax form? You have a choice. You can

• report the interest every year
• put off (defer) reporting the interest until you file a federal income tax return for the year in which the first of these events occurs:
  • you cash the bond and receive what the bond is worth, including the interest, or
  • you give up ownership of the bond and the bond is reissued, or
  • the bonds stops earning interest because it has reached final maturity"

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_itaxconsider.htm

 

[Alvin Tostig]

so just to be clear:

I can purchase $20,000 total ($10,000 each) in I-bonds for me and my wife before the end of 2021, and get this 7.12 rate, and then in the next calendar year, specifically in early January, I can do this all over again and purchase another $20,000 at this rate?

 

[Dash man]

so just to be clear:



I can purchase $20,000 total ($10,000 each) in I-bonds for me and my wife before the end of 2021, and get this 7.12 rate, and then in the next calendar year, specifically in early January, I can do this all over again and purchase another $20,000 at this rate?

Yes, the purchases for you and your wife have to be under each of your own names.
The comment above about purchasing $20k under one name and getting away with it once doesn’t work anymore like it used to.

 

[Sunset]

Yes, the purchases for you and your wife have to be under each of your own names.
The comment above about purchasing $20k under one name and getting away with it once doesn’t work anymore like it used to.

Thanks, I updated my post as to not mislead folks.

 

[Stillwater007]

I purchased 10k of I-bonds back in September which was in the 3% range. Now that it's gone up in Nov, have my Ibonds adjusted to the new %rate or is it still in the original 3% rate?
The Website has some info on this but seems a little confusing.

Thanks!

 

[Dash man]

I Bond rate 11/2021

I purchased 10k of I-bonds back in September which was in the 3% range. Now that it's gone up in Nov, have my Ibonds adjusted to the new %rate or is it still in the original 3% rate?
The Website has some info on this but seems a little confusing.

Thanks!

They will update on the six month anniversary of the iBond purchase ( the 1st of the month)

 

[Stillwater007]

They will update on the six month anniversary of the iBond purchase.

Ah! That makes much more sense. Thank you!

 

[MandM]

so just to be clear:



I can purchase $20,000 total ($10,000 each) in I-bonds for me and my wife before the end of 2021, and get this 7.12 rate, and then in the next calendar year, specifically in early January, I can do this all over again and purchase another $20,000 at this rate?

Alvin, just one thing of note you do not need to purchase in early January, you can purchase toward the latter half of January and be credited in the system with purchasing as of Jan. 1st. That way you can get a few pennies of interest from an online savings account before sending money to Treasury Direct.

Sent from my SM-G955U using Early Retirement Forum mobile app

 

[meleana]

Yes, the purchases for you and your wife have to be under each of your own names.
The comment above about purchasing $20k under one name and getting away with it once doesn’t work anymore like it used to.

I was wondering this also because our I Bonds are under both names. I wanted to do $20,000. I have an account and my husband has an account and the I Bonds in our accounts are under both names.


So when I bought the $10,000 worth this month, I bought them registered under both names (as I always have done) and then realized that I probably can't buy another $10,000 in my husband's account.


Which brings me to another question: I want to add our son on our account/I Bonds as a POD but I cannot see how to do this. I have not been able to get a decent answer from Treasury Direct regarding this.


I want to leave my husband and I as owners so if something happens to one of us, the other has access to the bonds, but if/when we both pass I want my son to be able to just take over them.

 

[Dash man]

I Bond rate 11/2021

I was wondering this also because our I Bonds are under both names. I wanted to do $20,000. I have an account and my husband has an account and the I Bonds in our accounts are under both names.


So when I bought the $10,000 worth this month, I bought them registered under both names (as I always have done) and then realized that I probably can't buy another $10,000 in my husband's account.


Which brings me to another question: I want to add our son on our account/I Bonds as a POD but I cannot see how to do this. I have not been able to get a decent answer from Treasury Direct regarding this.


I want to leave my husband and I as owners so if something happens to one of us, the other has access to the bonds, but if/when we both pass I want my son to be able to just take over them.

We’ve set up two accounts, one with my SSN as primary and one with DW’s SSN as primary. So you can buy $10,000 worth in each of the accounts with both of you listed on each.
I believe they allow POD if the bond is in one person’s name with the second as beneficiary. I don’t think they’re set up for three names. You can however, set up a trust and put the iBonds in the name of the trust, which will follow whatever beneficiaries you hav set up in the trust.

 

[meleana]

We’ve set up two accounts, one with my SSN as primary and one with DW’s SSN as primary. So you can buy $10,000 worth in each of the accounts with both of you listed on each.
I believe they allow POD if the bond is in one person’s name with the second as beneficiary. I do think they’re set up for three names. You can however, set up a trust and put the iBonds in the name of the trust, which will follow whatever beneficiaries you hav set up in the trust.

Oh so that is interesting. I didn't know that. My husband does have his own account so I have to look at that and consider buying more.


As for a trust, not worth setting up one just for this purpose I would think. We don't have a trust because the only thing that would go in it would be our house and cars and the bonds and our atty even said not worth it and I agree.


Thanks for your help!

 

[Dash man]

Oh so that is interesting. I didn't know that. My husband does have his own account so I have to look at that and consider buying more.

Sorry, I just corrected a typo. I don’t think they allow three names.

 

[Linney]

We’ve set up two accounts, one with my SSN as primary and one with DW’s SSN as primary. So you can buy $10,000 worth in each of the accounts with both of you listed on each.
I believe they allow POD if the bond is in one person’s name with the second as beneficiary. I don’t think they’re set up for three names. You can however, set up a trust and put the iBonds in the name of the trust, which will follow whatever beneficiaries you hav set up in the trust.

Oh so that is interesting. I didn't know that. My husband does have his own account so I have to look at that and consider buying more.

Ditto. My husband and I both have accounts. His IBonds are registered as HISNAME WITH MYNAME. Mine are registered as MYNAME WITH HISNAME. 10K purchased in each account for a total of 20K this year. I'll buy another 20K at the end of January 2022.

As for a trust, not worth setting up one just for this purpose I would think. We don't have a trust because the only thing that would go in it would be our house and cars and the bonds and our atty even said not worth it and I agree.

Same here, doesn't seem worth it. I'll consider doing the Ibond income tax refund method however.

 

[RetiredAt55.5]

Here's info about registering ibonds from the treasurydirect site -

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/registeringibonds.htm

 

[Gearhead Jim]

Two questions, probably already answered but I didn't find them:

Is the $5000 purchase of paper ibonds from a tax refund above the $10k/person limit, or included in the limit?

Can Vanguard buy ibonds and hold them in my IRA or taxable account?

 

[RetiredAt55.5]

Is the $5000 purchase of paper ibonds from a tax refund above the $10k/person limit, or included in the limit?

The limits apply separately (i.e., you can do both).

Lots of info here -

https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm

 

[Linney]

Can Vanguard buy ibonds and hold them in my IRA or taxable account?

No, sorry. Ibonds cannot be held in an IRA or brokerage account. They can only be purchased and redeemed via TreasuryDirect (aparently some banks will do this but Bogleheads complain that it is getting increasing difficult to find ones that will).

This question is frequently asked on the Bogleheads site.

 

[steelyman]

I Bond rate 11/2021

This is pretty basic for people participating in this thread. Still, I noticed an I bond intro piece on CNBC:

https://www.cnbc.com/video/2021/11/...isk-free-investment-says-author-john-lim.html

 

[Mulligan]

This is pretty basic for people participating in this thread. Still, I noticed an I bond intro piece on CNBC:

https://www.cnbc.com/video/2021/11/...isk-free-investment-says-author-john-lim.html

Yes, I saw that on Squawk this morning. Interestingly Becky Quick had never heard of them and stated she just bought them up for her and her family. Andrew Ross Sorkin co-anchor asked to talk to her off online about them because he wanted to buy them also.

 

[mystang52]

I've been a proponent of US Savings Bonds since the good ol' fashioned days of payroll deduction and paper bonds. My first payroll deduction? $6.25 biweekly, back in 1984. We had no debt besides a mortgage, virtually no savings, but were pretty much living paycheck to paycheck. I figured I'd never miss that $6.25, and I was right. Very quickly I kept increasing the payroll deduction and simultaneously learned the beauty of "pay yourself first."
But until ER.org, I didn't know about the 2-account loophole. I just set up a second account in DW's name and bought $10,000. Savings Bonds are not our primary investment by a long shot, but do make up largest portion of our liquid savings.

 

[steelyman]

Yes, I saw that on Squawk this morning. Interestingly Becky Quick had never heard of them and stated she just bought them up for her and her family. Andrew Ross Sorkin co-anchor asked to talk to her off online about them because he wanted to buy them also.

I think you should tell her to join e-r.org! Just say Warren sent you, that’ll get her attention.

 

[Mulligan]

I think you should tell her to join e-r.org! Just say Warren sent you, that’ll get her attention.

She loves her Warren doesnt she!

 

[steelyman]

She loves her Warren doesnt she!

I think it’s mutual. They’re a cute couple.

 

[John Galt III]

May have already been answered, but too much to read through. Question: to get the $5,000 i-bond via 'tax refund', do you need to have a 'real' refund? Or can you simply overpay your owed tax amount by $5,000 to create your 'refund', and instruct IRS to open an i-bond for $5,000 for you? Thanks.

 

[4legsgood]

Finally, i-bonds are cool!