Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I have a $103,000 IRA on a CD that matures Jan. 2012. I am

Customer Question
I have a $103,000 IRA...
I have a $103,000 IRA on a CD that matures Jan. 2012. I am 73 years old and would like to close the IRA and invest the money in a $100,000 life insurance. How much would I have to pay in taxes if I withdraw the entire amount?
Submitted: 6 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 14 minutes by:
12/2/2011
Tax Professional: Bill, Enrolled Agent replied 6 years ago
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
Verified
If you withdraw the entire account then the amount of tax you will owe will depend on the amount of your other income, your filing status, and your deductions. For example, if you file single and your only other income is social security of $12,000 a year then the tax on the withdrawal will be approximately $22,000. It may make sense to spread the withdrawal over 2 years by withdrawing half of it this year and the balance in January of next year to possibly reduce the overall tax. If it is a bank CD, many banks waive any early redemption penalties for IRA owners over age 70 1/2. You may want to review the bank's policy on this.
Ask Your Own Tax Question
Customer reply replied 6 years ago

I am married, filing jointly. Our combine taxable income for 2010 was about $32,000. Will that change what I have to pay on the IRA withdrawal?

 

Are you saying I can withdraw $50,000 before Dec. 31,2011, and then the other $50,000 on January 2012? If so, how much would I have to pay each year (more or less, of course).

 

Thank you.

Tax Professional: Bill, Enrolled Agent replied 6 years ago

If the $32,000 is taxable income after deductions (such as the standard deduction or itemized deductions, personal exemptions etc), then the additional tax will still be about $22,000. If you spread it over 2 years then the additional tax will be about $18,000 over the 2 years ($9,000 each year). These are rough numbers since I don't know how much your social security benefits are.

Many banks waive early redemption penalties on CDs for IRA owners over age 70 1/2. If your bank does then you could withdraw $50,000 this year and place the other funds in a money market balance within the IRA. In January you could withdraw the balance from the IRA. You will need to check with your IRA to see if they will waive any penalties.

Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
Experience: EA, CEBS - 35 years experience providing financial advice
Verified
Bill and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Bill Your Own Question
Bill
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
3,153 Satisfied Customers
Experience: EA, CEBS - 35 years experience providing financial advice

Bill is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Does the new (in effect 01-01-2018) standard deduction for
Does the new (in effect 01-01-2018) standard deduction for couples of $24,000. apply to 2017 tax prep? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Please let me know what is the standard deduction on the
Hi. Please let me know what is the standard deduction on the 1040 form for 2017 for a single person with no dependents. This is for a friend. This is in California. Thank you.… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Whats the best tax software to file personal and business
Whats the best tax software to file personal and business taxes. we started our firm last year and we have very few clients we would like to pay per tax file because we have about 30 clients only.What… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
502 satisfied customers
My wife is and OTR driver can we claim standard deduction
My wife is and OTR driver can we claim standard deduction and her per diem both? she is paid by 10-99 … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
The 2018 tax law will allow homeowners to deduct property
The 2018 tax law will allow homeowners to deduct property taxes and either income or sales taxes with a combined limit on these deductions being limited to no more than $10,000. What does this mean? w… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Have a tax question about what is considered taxable income.
Have a tax question about what is considered taxable income. What is your fee? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,068 satisfied customers
A retired person is receiving ss benefits. They sold an
a retired person is receiving ss benefits. They sold an investment property and now wish to place the proceeds into laddered CD's. this will generate interest income. is there a calculator that can fi… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Is the interest one pays on a personal loan a tax deduction?
Is the interest one pays on a personal loan a tax deduction? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,785 satisfied customers
Suppose my taxable income in 220,000 this year and the tax
Suppose my taxable income in 220,000 this year and the tax rate is X up to 200K, but Y for 200and over, do I pay Y on the full 220K or just that above 200K? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am not filing schedule A for itemized deductions, but
I am not filing schedule A for itemized deductions, but would like to include sales tax in 1040 Form. Where do I put it? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
What is the 2016 total standard deduction for single with 1
hi. what is the 2016 total standard deduction for single with 1 dependent and not itemizing? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
If my deductions are less than the standard deductions and I
If my deductions are less than the standard deductions and I have no taxes to file do I need to file. … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
If I prepare an itemized deduction, can I also deduct the
If I prepare an itemized deduction, can I also deduct the standard deduction? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
What is the higher standard deduction for age 65+ Referring
What is the higher standard deduction for age 65+ JA: The Accountant will know how to help. Please tell me more, so we can help you best. Customer: Referring to line 24 on the 1040a form JA: Is there … read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,338 satisfied customers
I am filing schedule a - itemized deductions - I see
I am filing schedule a - itemized deductions - I see interest(item 10) insurance(item 13) but I can not find the property tax deduction. Is property tax I'd deductible Thank you… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Shouldn't my standard deduction lower the amount of taxes I
Shouldn't my standard deduction lower the amount of taxes I owe? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
What is the standard deduction for Married filing separate
What is the standard deduction for Married filing separate on the Iowa tax form 1040a line 37? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I need the standard deduction for a married couple ( Expats)
Good Morning. I need the standard deduction for a married couple ( Expats) for line 40 of US tax form 1040. Prior years it has always been more than standard deduction listd on the side colum on page … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x