Tax Refund to iBonds - Electronic option?

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Topic Author
STC
Posts: 415
Joined: Wed Nov 14, 2012 9:22 am

Tax Refund to iBonds - Electronic option?

Post by STC » Sun Jan 06, 2013 12:23 pm

Tax Caster is telling me I am in for a refund of $10k - $15k for 2012. I am aware that you can get paper iBonds in the amount of $5k per SS# with your refund. My ... silly ... question. How do I get those paper iBonds into my TreasuryDirect account? I hate having paper, and would much prefer just to have electronic records...

and yes, I am aware of smartexchange (https://www.treasurydirect.gov/indiv/re ... geinfo.htm). I just dont see the point in the two hop process, and want to just have the money show up in my treasurydirect account, direct from my tax return.

sscritic
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Re: Tax Refund to iBonds - Electronic option?

Post by sscritic » Sun Jan 06, 2013 12:30 pm

What does the form (and instructions) say? Do you have to get paper bonds?

Hint: you can't buy electronic I bonds directly, but you can deposit your refund with Treasury Direct. Guess what you can do with your money once it is at TD.
You can request a deposit of your refund (or part of it) to a TreasuryDirect® online account to buy U.S. Treasury marketable securities and savings bonds.
...
If your deposit is to a TreasuryDirect® online account, check the “Savings” box. You must check the correct box to ensure your deposit is accepted.
I have never used this form personally, but it is a favorite with the Chinese (I think the IRS must have chosen these numbers on purpose). My favorite form numbers are 1040, 2210, and 8888.

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SSSS
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Re: Tax Refund to iBonds - Electronic option?

Post by SSSS » Sun Jan 06, 2013 12:37 pm

Request your tax refund via direct deposit, specify routing number 051736158, and for the account number, use your Treasury Direct account number. The direct deposit will be placed in 0% C of I, which you can then use to buy bonds.

There's also a feature where you can fill out a Treasury Direct form and then put "P" after the account number on your direct deposit in order to have Treasury Direct automatically purchase bonds, but that's mainly intended for paycheck contributions and probably wouldn't be worth the trouble for a one-time tax refund.

Note: bonds purchased this way will still be subject to the $10,000/year limit. This will NOT get you an extra $5000 like paper bonds will.

Additional information:

http://www.treasurydirect.gov/indiv/pro ... llinfo.htm
http://www.treasurydirect.gov/indiv/hel ... rnMore.htm
http://www.treasurydirect.gov/indiv/hel ... ptions.htm

Topic Author
STC
Posts: 415
Joined: Wed Nov 14, 2012 9:22 am

Re: Tax Refund to iBonds - Electronic option?

Post by STC » Sun Jan 06, 2013 1:05 pm

SSSS wrote:Request your tax refund via direct deposit, specify routing number 051736158, and for the account number, use your Treasury Direct account number. The direct deposit will be placed in 0% C of I, which you can then use to buy bonds.

There's also a feature where you can fill out a Treasury Direct form and then put "P" after the account number on your direct deposit in order to have Treasury Direct automatically purchase bonds, but that's mainly intended for paycheck contributions and probably wouldn't be worth the trouble for a one-time tax refund.

Note: bonds purchased this way will still be subject to the $10,000/year limit. This will NOT get you an extra $5000 like paper bonds will.

Additional information:

http://www.treasurydirect.gov/indiv/pro ... llinfo.htm
http://www.treasurydirect.gov/indiv/hel ... rnMore.htm
http://www.treasurydirect.gov/indiv/hel ... ptions.htm
The point is to capture the full $15k in space per SS#.

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neurosphere
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Re: Tax Refund to iBonds - Electronic option?

Post by neurosphere » Sun Jan 06, 2013 2:25 pm

STC wrote: The point is to capture the full $15k in space per SS#.
The only way to do that is by purchasing paper bonds with your tax refund.

Edited to add: then you have to mail in the bonds with a conversion form, and they eventually end up as held in online form.
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

sscritic
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Re: Tax Refund to iBonds - Electronic option?

Post by sscritic » Sun Jan 06, 2013 2:29 pm

STC wrote: I just dont see the point in the two hop process, and want to just have the money show up in my treasurydirect account, direct from my tax return.
With luck, they will eliminate the paper option next year and you won't have to worry about it. :)

sscritic
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Re: Tax Refund to iBonds - Electronic option?

Post by sscritic » Sun Jan 06, 2013 2:35 pm

STC wrote:The point is to capture the full $15k in space per SS#.
Was that in your OP? I missed it. I only saw that you hated paper.

555
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Re: Tax Refund to iBonds - Electronic option?

Post by 555 » Sun Jan 06, 2013 4:21 pm

STC wrote:"I am aware that you can get paper iBonds in the amount of $5k per SS# with your refund. My ... silly ... question."
Is it $5k per SS# or $5k per tax return? Can one get $5k of paper I-Bonds for themselves and $5k of paper I-Bonds for their spouse from the one tax return? Can you also get them for your kids from that same tax return?

These are all to be understood to be in addition to the $10k of electronic I-Bonds per SS# that you can get anyway.

sscritic
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Re: Tax Refund to iBonds - Electronic option?

Post by sscritic » Sun Jan 06, 2013 4:56 pm

555 wrote: Is it $5k per SS# or $5k per tax return? Can one get $5k of paper I-Bonds for themselves and $5k of paper I-Bonds for their spouse from the one tax return? Can you also get them for your kids from that same tax return?

These are all to be understood to be in addition to the $10k of electronic I-Bonds per SS# that you can get anyway.
Let me quote myself (as I am one of the best sources of information I know, not the best, but one of the best):
What does the form (and instructions) say?
I will help you out. The form is form 8888. The instructions are printed on it, so you don't have to go looking for separate instructions.

Here is some more help:
http://www.irs.gov/pub/irs-pdf/f8888.pdf

Good reading skills are essential.

The actual answers to your questions are no, yes, no, yes. These answers are based on the questions that you actually asked as I read them, not the questions you may have thought you asked.

P.S. Your last statement is not correct as I interpret the thought behind it.

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Langkawi
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Re: Tax Refund to iBonds - Electronic option?

Post by Langkawi » Sun Jan 06, 2013 5:04 pm

Anyone who uses the term "iBond" should be banned from buying them.

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SSSS
Posts: 1893
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Re: Tax Refund to iBonds - Electronic option?

Post by SSSS » Sun Jan 06, 2013 5:44 pm

Langkawi wrote:Anyone who uses the term "iBond" should be banned from buying them.
Don't worry, I'm sure Apple's lawyers are on the case.

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theac
Posts: 311
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Re: Tax Refund to iBonds - Electronic option?

Post by theac » Mon Jan 07, 2013 5:32 am

SSSS wrote:Request your tax refund via direct deposit, specify routing number 051736158, and for the account number, use your Treasury Direct account number. The direct deposit will be placed in 0% C of I, which you can then use to buy bonds.

There's also a feature where you can fill out a Treasury Direct form and then put "P" after the account number on your direct deposit in order to have Treasury Direct automatically purchase bonds, but that's mainly intended for paycheck contributions and probably wouldn't be worth the trouble for a one-time tax refund.

Note: bonds purchased this way will still be subject to the $10,000/year limit. This will NOT get you an extra $5000 like paper bonds will.

Additional information:

http://www.treasurydirect.gov/indiv/pro ... llinfo.htm
http://www.treasurydirect.gov/indiv/hel ... rnMore.htm
http://www.treasurydirect.gov/indiv/hel ... ptions.htm
So the only way to get the I-Bonds thru your tax refund is as paper bonds? (If you want $15,000 for the year)

Otherwise, if you merely have the IRS deposit the $5,000 return to your TD account,then do the purchase yourself online, it will count as part of your yearly $10,000 allowed online? And you lose out on the addition $5,000?

How about if you put the "P" after your acct number as you mention, would that get you the extra $5,000 in I-Bonds?
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha

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