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Posts Tagged With 'Tax Consequences'

Ask the Expert: Tax Consequences of a Maturing CD

Q: When my CD matures, can I put it into a savings account without having to pay taxes on it?

A: The answer is yes and no. The maturation of a CD is not, in and of itself, a taxable event which would trigger the payment of taxes. However, this is only because your bank should have been including income on the CD in each year???s 1099 form. In short, if you???ve been declaring income from that form on your taxes, then you would have been paying the taxes on the CD interest year-by-year, as it was earned.

The one caveat is that if the CD was part of an IRA or other tax-deferred retirement plan, you will want to make sure the proceeds roll into an account which the bank has also set up as tax-deferred plan.

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