Can T Bills be selected to mature in January, as opposed to December, so that tax on interest is available for investment through the entire year? Examples:
1. In 2023, Jack spends $100k on a 26w T-Bill @ 5% that matures on January 3rd, 2024. He is paid his $2,500 on said date. Assuming a 32% tax bracket, Jack owes Uncle Sam $800, but since it was paid in 2024, it's not due until April 15th 2025. So he reinvests this $800 until this date and makes around $54 from interest on tax dollars.
2. In 2023, Jill spends $100k on something similar, a 26w T-Bill @ 5%, but hers matures on December 27th, 2023. Like Jack, she is paid her $2500 in interest, but it's 2023 income. She needs to cough up the $800 in tax by Apr 15, 2024. She invests it for 16 weeks, and makes only $12. She loses interest on a year's investment of tax due, here about $42, because the interest on her 26w Bill was paid a week earlier, in Dec 2023.
In other words, can a year's interest can be earned on tax due simply by buying bonds that mature in January at the beginning of the tax year, and not December end of tax year, because the tax dollars are available until next year's tax due date?
Is this kosher? Ty.
1. In 2023, Jack spends $100k on a 26w T-Bill @ 5% that matures on January 3rd, 2024. He is paid his $2,500 on said date. Assuming a 32% tax bracket, Jack owes Uncle Sam $800, but since it was paid in 2024, it's not due until April 15th 2025. So he reinvests this $800 until this date and makes around $54 from interest on tax dollars.
2. In 2023, Jill spends $100k on something similar, a 26w T-Bill @ 5%, but hers matures on December 27th, 2023. Like Jack, she is paid her $2500 in interest, but it's 2023 income. She needs to cough up the $800 in tax by Apr 15, 2024. She invests it for 16 weeks, and makes only $12. She loses interest on a year's investment of tax due, here about $42, because the interest on her 26w Bill was paid a week earlier, in Dec 2023.
In other words, can a year's interest can be earned on tax due simply by buying bonds that mature in January at the beginning of the tax year, and not December end of tax year, because the tax dollars are available until next year's tax due date?
Is this kosher? Ty.
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