When someone overpaid their taxes, the IRS gives them an option to apply the over payment for the next year, to get an electronic bank deposit refund, or to get a refund in the form of paper I Bonds. The I Bond refund option is going away on January 1, 2025, per this U.S. Treasury press release. The regular electronic I Bonds limit remains unchanged at $10,000 per year.
The paper I Bond tax refund was the last vestige of paper I Bonds since they went electronic in 2012. The paper version is a pain to deal with, and the reason some people found it interesting was due to the fact that it increased your annual I Bond limits above the standard $10,000 cap. By taking a paper I Bond refund it was possible to get up to an additional $5,000 in I Bonds per year.
This option is going away January 1, 2025. Those who have not yet done their 2023 tax returns can still take advantage of the paper bond option until that time.
Hat tip to tipswatch
Am I the only one confused by iBonds and why anyone would hold onto them?
Yeah, sure, during times of mass inflation I’m sure it’s not half bad – but that isn’t exactly something that occurs often. In the meantime you’re getting well-below market rates for interest.
Believe me, I jumped on the bandwagon and got the 9 or 10% returns or whatever they were at for about $30k on my side and $30k on my wife’s side. But in the meantime you’re talking 2% while the rest of the market will easily give you 5% in as simple as a savings account with no limits.
tax free, is one reason
lol it sure as fuck isn’t tax free.
What you’re probably searching for – is that it is STATE tax free.
MASSIVE difference. Most states (outside of shitholes like CA) generally have tax rates that are well-below 10%. Not the same at all with federal income taxes.
This $10k limit just needs to be increased. With all the money we throw at corporate welfare, student loan dismissal, etc… whats wrong with giving a little more benefit to savings for the middle class.
iBond rate canNOT go below 0%. HOWEVER, the TIPS rate CAN go below 0%. So, in a depression you can lose value in TIPS but not in iBonds. Think about it as to why they restrict sales amount of iBonds.
1) Technically TIPS rate is whatever the market pays at auction. It can be negative, but it is fixed until maturity – just don’t buy one with a negative rate if that’s your concern. What *can* be negative for an existing TIPS bond is the inflation principal adjustment.
2) you’re mixing up depression and deflation.
do you think that Richard Wright is better or Tony Banks?
So they’ll be like collectors items! I especially like mine with the portrait of Einstein.
“On average, 35,000 tax filers each year bought paper Series I bonds: this represented .03 percent of tax filers, and less than 10 percent of Series I bond purchasers.”
I’m surprised that only 35,000 people bought these each year (though, that’s an average since the program started in 2010; I’m guessing it was higher in recent years when the rate was higher and more people knew about the option).
Their wording also implies only around 350,000 people on average bought I bonds via any method each year, which also sounds low. (Though, “less than 10 percent” could also be a small number like 0.1% which would mean 35 million people, so this quote doesn’t mean much.)
Glad I got mine when I did. I think they’re neat.
Oh no! Anyway.
Given inflation its kind of crazy the amount we are allowed to put in I bonds via normal means has not been adjusted up from 10K.
And now they’ve effectively reduced the total from $15k down to $10k.
It’s effectively unlimited if you setup a few trusts, which is very easy and costs a few bucks to get it notarized.
Also easy to use the gift box (borrowing against future year 10k annual limits). If you have the cash now is a good time, as the fixed portion of the rate is 1.3% (typically 0).
Hopefully theyre working on a digitial refund