Purchasing I Bonds on Form 8888 with balance of overpayment being applied to 2022 estimated taxes

[cdw3]

I have prepared our 2021 tax return requesting a $5,000 I Bond purchase on Form 8888 and have applied the balance of the overpayment to our 2022 estimated taxes. Before I can E-file our return, TurboTax asks "How do you want your $5000 federal refund?" and gives options for direct deposit or sending me a check.  In our case we don't want any amount returned via direct deposit or by check, since we want to use the full $5,000 to purchase I Bonds.  Unfortunately TurboTax will not let me continue without selecting one of these options.  Any suggestions?

[dmertz]

To apply some portion to your 2022 estimated taxes, go to Other Tax Situations -> Additional Tax Payments -> Apply refund to next year, then enter the amount to apply (the amount in excess of $5,000 in this case).  TurboTax will then allow only the remaining refund to be used to purchase an I bond.

[cdw3]

Thank you for your reply, but I have already done that.  The correct amount of the overpayment to be applied to 2022 is properly shown on Line 36 of Form 1040.  I also have completed the information for Form 8888 and it correctly shows the $5,000 to be used for the purchase of I Bonds on Form 8888.  Thus, there is no amount left to be refunded to me (by either direct deposit or check).  Nevertheless, TurboTax wants me to provide the information for one of these options.  I don't want the $5,000 refunded to me rather than to use it to purchase the I Bonds, which is what I understand from another community message has happened to some other TurboTax users.

[dmertz · Accepted solution]

You can select "Mail me a check" if nothing will be left after the purchase of the I bond and the amount applies to 2022 estimated taxes.  You won't actually get a check because the amount of the check would be $0.

You can also select direct deposit and enter your bank information, but since the remaining amount is $0, there won't actually be any deposit.

[cdw3]

Thank you very much!  That is the solution.  The wording is very confusing and hopefully TurboTax will consider making this easier to follow in the future.

[thecakid]

How do I purchase I bonds with my federal refund on turbo tax?

[MichelleLO]

Please see the below TurboTax Help Article for steps to follow to purchase savings bonds with your tax refund.

How do I buy savings bonds with my tax refund?

@thecakid