Will cd's or money market accounts affect taxes?

Answer 1

Yes, unless in an IRA, the interest earned is taxable each year, the notification for which is sent to each recipient via 1099INT form by the end of January.

One trick, when the interest is computed annually, is to buy them in January so the taxable interest doesn't have to be claimed until the next year.

Answer 2

Well, yes, you'll owe income tax on the interest you receive.