finance
 






 

Question by  mary18 (22)

How are taxes on CDs calculated?

 
+6

Answer by  Cecilia (2828)

For a standard bank CD (not in a retirement account) the interest is considered income when it's paid to you. It's added to your other sources of income on the front of your 1040. For a CD in a retirement account the same thing happens but not until you withdraw the money. Roth's are different because it's after tax money.

 
+5

Answer by  tamarawilhite (17883)

You only have to pay taxes on the interest paid on the Certificates of Deposit. You never pay taxes on your principal.

 
You have 50 words left!