can I have more than $10,000. in the bank without the IRS getting involved?

Question

I make about 24k a yr maybe more depending on my self empolyed income.
Every two weeks I save $1k in a CD account.
"I'm trying to save for a home"
M'I on the right track in doing so?

Answer 1

You are doing nothing wrong! I think you are confusing something, let me clarify. The $10k & the IRS thing has to do with single or closely structured cash deposits made of $10k or more. The only time a question is raised, is if you come to the bank & make a deposit in cash of $10k or more. You have to fill out a CTR (currency transaction report). If you dont fill it out, the bank will do it for you when you are gone (& that will look very suspicious that you refused to fill out a form & say you have nothing to hide.)

BTW: the IRS is involved regardless of how much you have in your account! Believe that.

Secondly: you may have more than $10k in your account. There is no limit as to how much you are allowed to carry a balance of in any of your accounts. You may have as many CDs & money market accounts as you would care to have. Although just for simplicity sake, upon maturity, consolidate some of them.

Now how you save $2000 every month after tax on $2000 a month pre tax is a different story. That would be something the IRS may be interested in.

Answer 2

You can basically have any amount you want in a bank.

The only time the IRS will get involved is if you are receiving interest on that money, in which case you should receive a 1099-INT from the bank. Most banks pay some ridiculously low interest (.2%) on checking accounts, so you are probably getting a couple bucks a month in interest payments which the bank has to report to the IRS, and which you should report on your taxes.

If you're going to have money in the bank, I would recommend a high-yield savings account or a money-market account. You can find an on-line bank (INGdirect, etc) that pays 4-5% which is much nicer than regular checking account rates.

$1000 every two weeks = approximately $24,000 a year in CDs on a $24,000 a year self-employed income?!? You better make sure you're accurately reporting ALL your income or the IRS will most definitely come-a-calling. They'll hear about the CDs when they mature and interest is reported on those.

Answer 3

The IRS will get involved because you have a CD, which pays interest.

The interest you earn on the CD is taxable income. It has a specific line on your tax return, and you should get a form from your bank (1099-INT) that tells you how much interest you earned.

In the case of interest, it's not how much, it's whether you earn it at all.

At any rate, I'd say you are definitely on the right track when it comes to saving up for a house. You could probably buy one right now without too much hassle, although you'll want to talk to a realtor and see if he/she recommends any banks, and learn all you can about private mortgage insurance (PMI), which is charged to folks who have less than a 20% downpayment.

Answer 4

Doing good. But one must wonder: if you are earning $24,000 a year, but putting $25,000 a year into the bank, what are you doing for grocery money? As for the IRS, as long as you are paying the appropriate taxes on that self-employment income (both income and Social Security), the IRS will be happy campers. The bank will have no reason to discuss your account with the IRS.

Answer 5

a cd? Never the right ttrack. Forget worrying about the IRS & try to actually get that home. as $1000 every 2 weeks = $26,000 you are making more than $24k. Hiding $$ is stupid. Just pay the tax & invest wisely. ADx PEO PGJ (the fall today a chance to buy) EWA (ditto) EFA SNH.