Filing an Income Tax Extension and Buying Paper I Bonds

Filing an Income Tax Extension and Buying Paper I Bonds

I’ve written in the past about the new Series I Savings Bond purchase limits and the fact that paper bonds have (mostly) gone away. I’ve also mentioned a possible strategy for getting extra (and paper, no less) savings bonds when you file your taxes — assuming that you’re getting a refund.

In short, this strategy involves overpaying your taxes and then requesting up to $5k of your refund in the form of I Bonds. In order to do this without giving the government a lengthy interest-free loan, I’ve decided to file an extension and send in an overpayment with along with IRS Form 4868.

As soon as that payment clears, I’ll file our return and request the refund in the form of a Series I Savings Bond, thereby allowing us to circumvent the nominal purchase limits. Just keep in mind that you can ask for a max of $5k in bonds even if you’re married and filing jointly.

Admittedly, our situation is somewhat unique in that we’ve already maxed out our bond purchases for the year and are looking for more. But if you’re in a similar situation, this is a pretty easy trick to score an extra $5k in bonds.

5 Responses to “Filing an Income Tax Extension and Buying Paper I Bonds”

  1. Anonymous

    Very interesting.

    Nickel, will you be publishing the Series I Savings Bond interest rate for May now that the inflation numbers are out for March? It looks to me like the interest rate will be around 2% for the next six month period, but I couldn’t locate the exact six-month inflation numbers (which you seem to have access to).

    Also, any chance that the fixed rate will be higher than 0%?

  2. Anonymous

    Be prepared for many bonds, not one! People are reporting the following on other sites instead of a single $5,000 bond: 4x$1,000, 1x$500, 1x$200, 6x$50!

    (Job security for govt employees?!)

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