I made a really stupid mistake a while back. I closed an IRA upon maturity to move it to another bank with a better interest rate. I got a check for the full amount, took it to the other bank, and mistakenly (and stupidly) opened a CD instead of an IRA. This account now matures tomorrow and I need to know what to do with the funds at this point. Can I now close the account and re-open it as an IRA? Thanks for any suggestions.
If you aren't at the age of retirement, the bank will have to report this to the federal government. And you will owe the government a lot of money at tax time.
My son made a mistake with an IRA and it cost him a lot of money.
You better talk to someone at your bank, as soon as possible. You will most likely have to hire a CPA (certified public accountant) to get you out of this mess.
If you were not 59 1/2 years old when you withdrew the IRA you may be charged a penalty because the withdrawal will be coded as a premature distribution. If you were 59 1/2 when you took out the IRA you will not be charged the penalty but you will lose any tax deferral advantages that you were getting with the IRA because if it has been more than 90 days you can't reinvest it in an IRA. If you withdrew it and it has not been 90 days you should still be able to reinvest it in an IRA as a rollover with no penalty.
Was the person who helped you at the bank aware that this was an IRA distribution? If so they should have advised you of the consequences.
You may want to contact your accountant to see what he would advise.
I worked in a bank for over 20 years and had to help people with this type of situation many times.
Good luck I hope this gets straightened out.
Thanks so much for your help. Unfortunately, it's been over 90 days so I guess I'm stuck. Another person who formerly worked at a bank told me the same thing--I should have been advised of the consquences, but wasn't. Oh well, I guess we all make stupid mistakes sometimes, but leave it to me to make one I'll really have to pay for literally! Thx again.
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