Will tax refund delays affect my IBond purchase?

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Fran K
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Will tax refund delays affect my IBond purchase?

Post by Fran K »

My friend got his tax refund from 2020 a few days ago. I am planning to make an extra tax payment so that I can receive $5,000 of my tax refund in I bonds. If my tax refund is as delayed as his will my ibonds be issued a year from now?
Last edited by Fran K on Wed Jan 26, 2022 11:40 pm, edited 1 time in total.
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Fran K
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Re: Will tax refund delays affect my IBond purchase?

Post by Fran K »

I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
Affable at 50
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Re: Will tax refund delays affect my IBond purchase?

Post by Affable at 50 »

Fran K wrote: Wed Jan 26, 2022 6:57 pm My friend got his tax refund from 2020 a few days ago. I am planning to make an extra tax payment so that I can receive $5,000 of my tax refund in I bonds. If my tax refund is as delayed as his will my ibonds be issued a year from now?
I believe it’s too late to make estimated payments for 2021. The payment was due by January 18. The only way to to get for a fourth quarter 2021 payment is to file your 1040 by the end of January.

Publication 505 covers this topic in more detail. Perhaps you find a loop hole is the document or develop a plan to overpay for the 2022 tax year on time.

https://www.irs.gov/pub/irs-pdf/p505.pdf
OhioGozaimas
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Re: Will tax refund delays affect my IBond purchase?

Post by OhioGozaimas »

Pay all or part of your estimated income tax due plus I-Bonds and indicate that the payment is for an extension using IRS Direct Pay [1], EFTPS [2] or a credit/debit card [3].

You'll receive a confirmation number for your records.

[1] https://www.irs.gov/payments/direct-pay
[2] https://www.eftps.gov/eftps/
[3] https://www.irs.gov/payments/pay-your-t ... redit-card
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nps
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Re: Will tax refund delays affect my IBond purchase?

Post by nps »

As OhioGozaimas stated, you don't need to make an estimated payment. You only need to make an extension request and add the desired prepay amount to it. The deadline for that is the normal tax filing deadline.
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samsoes
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Re: Will tax refund delays affect my IBond purchase?

Post by samsoes »

I'm doing the same thing, although I've already made my $5k estimated payment. I'll arrange for a small amount, less than $50, to be refunded by direct deposit to know when the electronic return has indeed been processed (whenever that may be). It's a crapshoot. I'm hoping for the best. Filing as early as possible may mitigate risk for a delay.
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Fran K
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Re: Will tax refund delays affect my IBond purchase?

Post by Fran K »

OhioGozaimas wrote: Thu Jan 27, 2022 1:11 am Pay all or part of your estimated income tax due plus I-Bonds and indicate that the payment is for an extension using IRS Direct Pay [1], EFTPS [2] or a credit/debit card [3].

You'll receive a confirmation number for your records.

[1] https://www.irs.gov/payments/direct-pay
[2] https://www.eftps.gov/eftps/
[3] https://www.irs.gov/payments/pay-your-t ... redit-card
This sounds like my best option. Do I need to file any paperwork related to the "extension" payment or just make the IRS Direct Pay payment and treat it as an estimated payment on my taxes?
BrokerageZelda
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Re: Will tax refund delays affect my IBond purchase?

Post by BrokerageZelda »

Fran K wrote: Thu Jan 27, 2022 7:48 am
OhioGozaimas wrote: Thu Jan 27, 2022 1:11 am Pay all or part of your estimated income tax due plus I-Bonds and indicate that the payment is for an extension using IRS Direct Pay [1], EFTPS [2] or a credit/debit card [3].

You'll receive a confirmation number for your records.

[1] https://www.irs.gov/payments/direct-pay
[2] https://www.eftps.gov/eftps/
[3] https://www.irs.gov/payments/pay-your-t ... redit-card
This sounds like my best option. Do I need to file any paperwork related to the "extension" payment or just make the IRS Direct Pay payment and treat it as an estimated payment on my taxes?
There is a paper form 4868 if you pay by mail, but not if you do it electronically through the above methods.
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Re: Will tax refund delays affect my IBond purchase?

Post by pshonore »

Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
My 2020 return was efiled through TurboTax and accepted April 15. I used Form 4868 to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and posssibly I Bonds
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Fran K
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Re: Will tax refund delays affect my IBond purchase?

Post by Fran K »

pshonore wrote: Thu Jan 27, 2022 8:40 am
Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
My 2020 return was efiled through TurboTax and accepted April 15. I used Form 4868 to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and posssibly I Bonds
Thanks for sharing this useful experience.

I asked my friend who just got his refund about interest. He said no interest was included in his refund. Posts like this one mane me wonder if overpaying to get Ibonds is worth it in the current environment of very late refunds.
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Re: Will tax refund delays affect my IBond purchase?

Post by samsoes »

pshonore wrote: Thu Jan 27, 2022 8:40 am
Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
My 2020 return was efiled through TurboTax and accepted April 15. I used Form 4868 to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and posssibly I Bonds
Form 4868 (Extension request) to request I-bonds on a timely-filed return? I thought Form 8888 was used in such a case? :confused
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pshonore
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Re: Will tax refund delays affect my IBond purchase?

Post by pshonore »

samsoes wrote: Thu Jan 27, 2022 9:45 am
pshonore wrote: Thu Jan 27, 2022 8:40 am
Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
My 2020 return was efiled through TurboTax and accepted April 15. I used Form 8888 (corrected) to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and possibly I Bonds
Form 4868 (Extension request) to request I-bonds on a timely-filed return? I thought Form 8888 was used in such a case? :confused
Thanks, typo on my part, too many 8's
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Re: Will tax refund delays affect my IBond purchase?

Post by N.Y.Cab »

Last February, the issue date for my I bonds was +1 day after my bank received deposit for the remainder of the tax refund. E-file processing usually takes 21 days according to IRS website so I would plan accordingly.
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Re: Will tax refund delays affect my IBond purchase?

Post by Flobes »

Timeline of my 2021 IBonds from my tax return:

2/2 Sent $5000 on IRS Direct Pay via checking account ACH.
•Reason for Payment: Balance Due •Apply Payment To: Income Tax - Form 1040 •Tax Period for Payment: 2021

2/8 Efiled via TaxAct, seeking $5000 refund as IBonds. "Return accepted" by IRS same day.

2/16 "Refund Approved" per IRS: Where's my refund?.
You requested that part or all of your refund be used for a US Savings Bond(s) purchase. It may take up to three weeks from the date your refund was sent for your Savings Bonds to arrive in the mail. The Bureau of the Public Debt will mail your bonds to the address shown on your tax return.

2/23 "Refund Sent" status.

3/1 IBonds arrived via USPS, with February issue date.

That's three weeks from my e-filing date to IBonds, delivered in 10 separate envelopes, in my hands! That's mighty time efficient.
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Fran K
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Re: Will tax refund delays affect my IBond purchase?

Post by Fran K »

Thanks for sharing Flobes. My return went in on 2/18. IRS website says it is being processed but suggests 21 days is what should be expected for a normal return. So hopefully next week.
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Re: Will tax refund delays affect my IBond purchase?

Post by neurosphere »

pshonore wrote: Thu Jan 27, 2022 8:40 am My 2020 return was efiled through TurboTax and accepted April 15. I used Form 4868 to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and posssibly I Bonds
Your e-filed 2020 return is still being processed? Yikes. I thought only paper returns were this delayed. Out of curiosity, did you have a refund pending (in excess of the I-bond amount) and if so I assume you are also still waiting for that refund while the return is being processed?
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Re: Will tax refund delays affect my IBond purchase?

Post by pshonore »

neurosphere wrote: Tue Mar 01, 2022 11:10 am
pshonore wrote: Thu Jan 27, 2022 8:40 am My 2020 return was efiled through TurboTax and accepted April 15. I used Form 4868 to request I Bonds. The IRS says my return is still being processed. No I Bonds have arrived. My guess is that some day I'll get my refund with interest and posssibly I Bonds
Your e-filed 2020 return is still being processed? Yikes. I thought only paper returns were this delayed. Out of curiosity, did you have a refund pending (in excess of the I-bond amount) and if so I assume you are also still waiting for that refund while the return is being processed?
Have not received the refund. "Where's my refund" says it still being processed. And I do have a small refund (less than $25) that I'm waiting for along with the I Bonds.
Last edited by pshonore on Tue Mar 01, 2022 12:04 pm, edited 1 time in total.
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Re: Will tax refund delays affect my IBond purchase?

Post by tibbitts »

Fran K wrote: Thu Jan 27, 2022 9:38 am Thanks for sharing this useful experience.

I asked my friend who just got his refund about interest. He said no interest was included in his refund. Posts like this one mane me wonder if overpaying to get Ibonds is worth it in the current environment of very late refunds.
I would have chosen to get I-bonds with part of my refund but given the potential for problems it's just not worthwhile for me. Maybe if it was just the refund delay alone or the USPS issues alone but combined there's just too much that can go wrong. I'd risk it for $50k in I-bonds but not $5k.
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Re: Will tax refund delays affect my IBond purchase?

Post by Mel Lindauer »

Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
While I have no special insight, I would imagine that your I Bonds would not be backdated to when you send in your return requesting them, especially given the extra work that would be required to do so when they're already months behind. (Not even sure there's a way for them to backdate newly-issued I Bonds.) Rather, I would expect them to be issued when they process your return, whenever that is. (I'm still waiting for a refund from an amended return that was received on August 27th, 2021 and still hasn't been processed.)
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Re: Will tax refund delays affect my IBond purchase?

Post by Wiggums »

I can’t imaging you will get back dated bonds. We are waiting on amended returns as well.
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Fran K
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Re: Will tax refund delays affect my IBond purchase?

Post by Fran K »

Well, I checked today and IRS says I should have my cash refund on the 9th and I Bonds within 3 weeks. Not too bad.
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Re: Will tax refund delays affect my IBond purchase?

Post by rbd789 »

My cash refund hit last Friday. Bonds arrived today.
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Re: Will tax refund delays affect my IBond purchase?

Post by dp76ortho »

This is my first year using my refund to purchase iBonds. My $5000 refund was accepted in late February and I received a portion (<$1000) of my iBonds on Monday, March 7. They are coming in multiple envelopes/denominations and I understand that is normal. However, it's been a few days and there is no sign of the rest of the iBonds. Is it unusual for the bonds to be mailed gradually and arrive several days apart?
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Re: Will tax refund delays affect my IBond purchase?

Post by slickwillie »

dp76ortho wrote: Wed Mar 09, 2022 6:52 pm This is my first year using my refund to purchase iBonds. My $5000 refund was accepted in late February and I received a portion (<$1000) of my iBonds on Monday, March 7. They are coming in multiple envelopes/denominations and I understand that is normal. However, it's been a few days and there is no sign of the rest of the iBonds. Is it unusual for the bonds to be mailed gradually and arrive several days apart?
Wondering the same. Received $4950 last Tuesday. Still no sign of the orphaned $50 bond.
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Re: Will tax refund delays affect my IBond purchase?

Post by dogagility »

slickwillie wrote: Thu Mar 10, 2022 4:32 am
dp76ortho wrote: Wed Mar 09, 2022 6:52 pm This is my first year using my refund to purchase iBonds. My $5000 refund was accepted in late February and I received a portion (<$1000) of my iBonds on Monday, March 7. They are coming in multiple envelopes/denominations and I understand that is normal. However, it's been a few days and there is no sign of the rest of the iBonds. Is it unusual for the bonds to be mailed gradually and arrive several days apart?
Wondering the same. Received $4950 last Tuesday. Still no sign of the orphaned $50 bond.
Don't know how common this is. Our eight envelopes arrived on the same day this year.
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Re: Will tax refund delays affect my IBond purchase?

Post by Wrench »

Mel Lindauer wrote: Tue Mar 01, 2022 3:19 pm
Fran K wrote: Wed Jan 26, 2022 11:36 pm I found this on the IRS website:

"Your savings bonds are ordered after the IRS completes processing your tax return. Once ordered, it may take up to three weeks for your savings bonds to arrive in the mail. If you're having a portion of your refund deposited directly into your bank account, you may receive your refund before your savings bonds arrive by mail."

This seems to indicate that the I Bonds would not be ordered until my tax return is processed. Can anyone confirm that I Bonds ordered with tax refunds can be delayed significantly? Given recent delays, does this mean I can't count on getting currently advertised rates and that I may miss out on some interest while my return is being processed?

I appreciate anyone who can share from his/her experience.
While I have no special insight, I would imagine that your I Bonds would not be backdated to when you send in your return requesting them, especially given the extra work that would be required to do so when they're already months behind. (Not even sure there's a way for them to backdate newly-issued I Bonds.) Rather, I would expect them to be issued when they process your return, whenever that is. (I'm still waiting for a refund from an amended return that was received on August 27th, 2021 and still hasn't been processed.)
That was my experience in 2020. I filed in March 2021 on paper because e-filing was rejected due to the tax programs not handling QBI properly (Both HRB and TT did it wrong!). My return was eventually processed in August and my iBonds arrived in September with an August issue date. The IRS also paid interest on the total refund and that was direct deposited with the rest of my refund.

Wrench
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Re: Will tax refund delays affect my IBond purchase?

Post by Angst »

rbd789 wrote: Mon Mar 07, 2022 9:41 pm My cash refund hit last Friday. Bonds arrived today.
Good to hear. My cash hit the bank yesterday, so I'm watching the mail! :sharebeer
(Glad I won't miss out on last November's rate cycle.)
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Re: Will tax refund delays affect my IBond purchase?

Post by drobtal »

Edited: You can arrange to have your federal and/or state tax refund deposited directly into your Treasury Direct account. You use form 8888 Part 1 Direct Deposit and use the TD routing number 051736158 (as found in the link below) and your TD account number for the direct deposit of a refund to TD accounts. Same IRS form as is used to request paper bonds. See https://www.treasurydirect.gov/indiv/re ... d_1208.htm.
It seems you can also split the refund between 3 TD and bank accounts, total. Once the funds are deposited at TD, you would make a purchase. I have not tried this yet, so I can’t say how quickly the deposit occurs or other wrinkles;
If you have already filed your return this year, then it is probably too late to use direct deposit for 2021 refunds.
Last edited by drobtal on Wed Apr 13, 2022 11:28 pm, edited 1 time in total.
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Re: Will tax refund delays affect my IBond purchase?

Post by Flobes »

drobtal wrote: Wed Apr 13, 2022 4:24 pm n lieu of receiving paper bonds in the mail as a tax refund, you can arrange to have your federal and/or state tax refund deposited directly into your Treasury Direct account.
Welcome to the Forum.

Yes, but...

If you have your refund diverted to Treasury Direct, then it counts against your annual $10k limit.

If you have your refund issued as paper bonds, you can get up to an extra $5k IBonds, in addition to the $10k limit.
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Re: Will tax refund delays affect my IBond purchase?

Post by drobtal »

Good point. I’m already at $10k in 2021. Thanks.
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