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If you transfer money from a Rollover Individual Retirement

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account to a Certificate of...
If you transfer money from a Rollover Individual Retirement account to a Certificate of Deposit what are the Tax Implications. Im Disable and retired from the Post Office. Married, wife still work. Im 59 yrs old.
Submitted: 7 years ago.Category: Tax
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Answered in 10 minutes by:
5/3/2010
Tax Professional: Merlo, Accountant replied 7 years ago
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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Hello JA Customer,

 

Anytime that you actually withdraw money from your IRA account, the amount you withdraw must be included as part of your taxable income for the year. If you are under age 59-1/2 at the time the withdrawal is made, an additional 10% early withdrawal penalty also applies.

 

The rate of tax that you would pay on the withdrawal depends on how much other income you and your wife have total for the year, as that it what ultimately determines the tax bracket you are in.

 

Just so you know, you do not have to actually withdraw money from your IRA account to purchase a CD. You can have your IRA custodian use the funds in your IRA account to purchase a CD on your behalf and simply let the CD remain part of your IRA account, in which case no taxes would be due because you would not actually be withdrawing the money from the the account.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you JA Customer

 

 

Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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