Do u really have to pay taxes when u get ur money from a CD account?

Question

ok i am gonna put $13152 in a CD account for 5 years @ at a rate of 4.498.

so after 5 years they will be $16,461.97. so when i go to get my money after 5 years do i really have to pay taxes on them? if so how much?

and what about TITANIUM MONEY MARKET SAVINGS account if i wanted to take all my money from that account ( i have $5000 right now), do i have to pay taxes on them? if so how much?

Answer 1

They are all taxed at 100% depending on your tax margin. Capital gains are taxed at 50%.

Answer 2

you almost always have to pay tax on interest earned, no matter if the gain is realized or unrealized.

every year, your bank will file a 1099-int, which shows the IRS that you've earned interest income in that tax year.

there is a minimum threshold at which you have to report interest income, but i'm not sure what the threshold will be for 2008.

Answer 3

Any interest is taxable unless it is in a tax sheltered account (such as an IRA or 401k). The financial institution will report your interest income to the IRS so you will need to pay taxes on it.