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8 Answers

Do you pay taxes on a traditional IRA?

Asked by: proffr 574 views YA Discussion

I have a traditional IRA account and I contribute $ 50 a month to it. I did not receive a 1099-R form from the insurance/investment company. Do I have to include my earnings from my traditional-IRA when I file my taxes, or only if I have withdrawn my money from the account?

Also do you have to mention the interest gained from having a bank savings account? It is probably not much more than a few dollars, but I don’t want to make mistakes.
Great thanks! Does this mean that I have to add up my YTD dividends and capital gains and report it as “tax exempt interest” on my 1040?

Also do I have to subtract my monthly contribution to my IRA account from my income?

How others found here:

  • adding to ira account will you have to pay taxes
  • do you pay tax on earnings from traditional ira accounts
  • do you pay taxes on earnings from traditional ira

8 Answers



  1. m0dernangel on Mar 02, 2013 Reply

    The purpose of an IRA is for the interest accumulate tax-free. You will pay taxes on the gain only when you cash out. The downside is you cannot withdraw without penalty until you reach retirement age.

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  2. Quick Answers on Mar 02, 2013 Reply

    An IRA is a specialized savings account.

    The money you put in is either deductible (pre-tax) or non-deductible (after-tax). While the money is in the IRA, it grows. The pre-tax money and the earnings are not taxed until you actually take money out. You had no withdrawals, so you will not get a 1099-R. You will get a 5498.

    As for your savings account, while you won’t get a 1099-INT unless the total interest is more than $ 10, you are supposed to add all interest income together and report it.

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  3. Bostonian In MO on Mar 02, 2013 Reply

    You get a 1099-R when you withdraw funds from the IRA. Until then you are not taxed on any gains. You do get a deduction for the contributions.

    Interest from bank accounts and other sources is taxable income to you. You must report it on your return. You will receive a Form 1099-INT if the amount is $ 10 or more, but you must report all interest regardless of the amount.

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  4. Ed on Mar 02, 2013 Reply

    you only pay taxes when you withdraw your ira. (don’t forget to reduce your gross income by the amount you contributed). and your bank will send you a 1099i for your savings interest.

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  5. Judy on Mar 03, 2013 Reply

    Only when you withdraw from the IRA. Then you’ll get a 1099-R.

    Yes the interest is required to be reported even if it’s only a dollar.

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  6. tro on Mar 03, 2013 Reply

    you have a tax advantage when you contribute
    you will pay tax on the distribution if and when you take any

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  7. tracy on Mar 03, 2013 Reply

    You can deduct up to $ 5000 contribution on your tax return if you are under age 50.
    You get 1099-R ONLY when you withdraw the fund.

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  8. Bobbie on Mar 03, 2013 Reply

    Not as long as you do NOT take any distribution amount OUT of your traditional IRA account and the other transaction that are going on inside of your IRA do NOT ever have to reported on your FIT return during each tax filing season.
    And are you taking advantage of the adjustment to income deduction on your 1040 income tax return page 1 line 32 for this purpose 32 $ $ $ amount for the 2012 tax year to adjust your total income amount down at that time.
    And also the retirement savers tax credit amount when you can qualify for it by using the IRS form 8880 1040 page 2 line 50 for this purpose and time in your life.
    Yes all interest income that you do receive during the tax year is supposed to be entered on the correct line of your 1040 income tax return for this purpose even if it is $ 1 OK.
    YES 1099 consolidated forms does have the 1099-INT and the 1099-DIV and the 1099-B and also the 1099-MISC that might all have some numbers and information in all of the different boxs and all of them will have to entered CORRECTLY on your correctly completed 1040 FIT return during the 2013 tax filing season and the correct lines because the IRS also does receive a copy of this same information for this purpose and time in your life.
    It should benefit you to reduce your total income by your IRA contribution amount when you can qualify to do so by reducing your TAXABLE income UNLESS you would have a ROTH IRA account at this time and it woul NOT be a decuctible amount at all for this purpose and time in your life.
    Hope that you find the above enclosed information useful. 03/02/2013

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