money markets
do i have to pay taxes on withdrawls from my money market gold my husband says yes, i thought i was advised no that is why i put this money there i believe its a liquid money market we have had to move some money around to pay some bills and my husband and i are argruing about this account i started with $34,000..now down to about $18,500 let me know please
(1) Answer
Staff
Taxes are only paid on interest income from money market accounts. For example, if you deposit $1000 into a money market on January 1, earning 3% APY, you would have $1030 on December 31. The only taxes owed would be based on your federal/state taxes on the $30.
You mention that your money market is down to $18,500. I assume that this is from spending the money. Money markets rarely lose principal, though the recent financial crisis has caused some money market mutual funds to slip on principal.
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