in may 07 and it is 8 month bank cd ending in jan 08. Also, my interest will be left in the bank to be compunded. When it is tax season comes up for me. Do I file for 7 months for the year 07. Or do I have to pay this cd in taxes in 08 since the cd finishes in jan 08.
THANKS!!!!!!!!!!!!!!!
2007-06-04 03:45:06 · 5 answers · asked by David W 2 in Business & Finance ➔ Taxes ➔ United States
You'll get a 1099-INT from the bank showing the interest, and the year on the 1099 is the year you'll pay the tax for.
On a one-year or shorter CD, the interest is taxed at the end of the period. For longer CD's, interest is taxed each year. The bank should handle the 1099's properly, so you'll just report the interest for the year you get the 1099.
2007-06-04 07:16:00 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
It would be best to talk to a tax attorney or a CPA.
The bank will give you a tax form that says how much interest was earned in 2007 and 2008.
Ask the banker how is the interest calculated and paid.
You can ask a $500/hour tax attorney a question for less than a economy cup of coffee at a convenience store, 86 cents a day or less and get 6 major areas of benefits. It's even less in some states.
You can see more about it at:
www.prepaidlegal.com/info/joebentson
www.prepaidlegal.com/idt/joebentson
Best wishes,
Joe
2007-06-04 03:54:50 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I think it would depend on the 1099-INT issued by the bank. I have seen banks report all the interest in the year of maturity, 2008 for you, and I have seen banks allocate the interest between the years in question. One of my clients has cd's with Wachovia, and they prorate, so depending on your bank you might have some interest income in both 07 and 08. Ask your bank how they report interest to the IRS ..... at maturity or prorated.
2007-06-04 04:33:02 · answer #3 · answered by RichManPoorMan 2 · 0⤊ 0⤋
You pay taxes when you get the money or could get it - 08 at the earliest. You need to ask the bank how they issue the 1099 (in US) on the account - if they tell the IRS you earned money on the CD, then you owe taxes.
2007-06-04 03:50:21 · answer #4 · answered by Mike1942f 7 · 0⤊ 0⤋
apprehensive approximately no longer something account became into in 3 names and new account became into in 3 names, so no difference taxwise only save any information that prepare the place the money interior the account got here from at the start in case IRS ever questions it they're no longer at risk of realize this, till/till between the three on account dies
2016-11-25 21:30:41 · answer #5 · answered by ? 4 · 0⤊ 0⤋