Quote:
Originally Posted by Haggar
I'm a CPA and here's my answers:
First one easy question - on CD's outside of retirement accounts interest is taxable when paid (not as it is accrued). The taxpayer has to have constructive receipt (be able to get their hands on the money to be taxable).
As to whether accrued interest on a CD is added to market value in a retirement plan used as a basis for calculating. The answer would be appear to be yes after doing research though I cannot find any specific reference to it in the code or regs.
As indicates before a minor problem as this increase in market value due to accrued interest would be divided by the holder over their life expectancy.
A reminder - start doing the work for your 2023 Qualified Charitable Donations now - if you qualify. A wonderful way to reduce income for both income taxes and IRMMA.
|
Hey, Haggar, thanks,
I am into QCDs. In fact, I tell friends about them, before their eyes begin to glaze over, as they start to look furtively for an exit.
I think it was 2015, not sure, when QCDs were made permanent in the tax law instead of having to wait until late in the year to find out if QCDs would be a thing in each given year. But I was not old enough yet then to worry about RMDs.
When the 2017 tax law changes came into play, the old charitable deduction could not help much anymore for a lot of taxpayers but if RMD age, the QCD could work even better — and it fortunately was already in the tax law and somehow escaped being taken out in 2017.
It is good that the QCD can also avoid IRMAA for those who are charitably inclined and/or would rather give money to charity than to the government for higher Medicare costs. But numbers, of course, will vary by returns and inclinations.
Btw, the reason I have been sounding a bit obsessed with tax questions is because November is when I try to project numbers to see if anything needs to be or can be adjusted. (Yes. I am a boring woman.
)
Boomer