How The Feds Dictate What You Do With Your Money

OneEyedDiva

OneEyedDiva

SF VIP
Location
New Jersey
The bank rep who helped me open a new safe deposit box said as part of her spiel explaining the rules, that it's illegal to store cash in a safe deposit box. I understand the reasoning behind that if someone is committing a crime, but what about regular folks who are not. Other ways the Feds are telling us what we can and cannot do with our money:
~Limits your monthly transactions from an account.
”The federal rule, also known as Reg D, comes from the Federal Reserve Board and puts a limit of six transactions per month on certain transfers and withdrawals from your savings or money market accounts. If you go over the limit, the bank or credit union can charge you a fee, close your account or convert it into a checking account."

~You can be charged with criminal activity if you decide to deposit $10,000 in increments even though no criminal act was intended.
It’s called Structuring." If you deposit $10,000 or more, the bank must report the transaction to the Internal Revenue Service, and you’ll need to explain where you got the money. Don’t even think about dividing the cash into smaller amounts to stay below this limit, because the IRS can investigate you for structuring, which is an attempt to prevent the bank from reporting your deposit. Structuring is illegal. Even if you earned the money through legal channels and paid the necessary taxes, the IRS can charge you with criminal activity and take your money."

~People cannot contribute as much as they want to their retirement accounts. You will incur a 6% tax for excess contributions. Read about the limits here and other IRA rules here:
https://www.irs.gov/retirement-plan...yee/retirement-topics-ira-contribution-limits

~You have to withdraw your required minimum distributions (RMD's) by a certain age from a traditional IRA even if you don’t need or want to.
https://money.usnews.com/money/retirement/401ks/articles/new-rmd-rules-for-2023

~You have to withdraw RMDs from an inherited IRA even when it’s a Roth.

https://www.irs.gov/retirement-plan...nt-topics-required-minimum-distributions-rmds

Update: @Harry Le Hermit pointed out in his reply (#10), that there is no federal law regarding not storing cash in safe deposit boxes. So they can't be blamed for that one. Here is an article that supports what Harry posted: https://www.legalmatch.com/law-library/article/safe-deposit-boxes.html
 

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OneEyedDiva said:
Don’t even think about dividing the cash into smaller amounts to stay below this limit, because the IRS can investigate you for structuring, which is an attempt to prevent the bank from reporting your deposit. Structuring is illegal. Even if you earned the money through legal channels and paid the necessary taxes, the IRS can charge you with criminal activity and take your money."
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I thought once about doing that
But just that once
Sometimes sound judgement is a bit of a savior

Buying and selling properties can get tempting
But taking the hit makes sleep come easier

No, I don't do any market investing to keep pace with inflation or keep from income hits
Nor will I ever

It's land for me
For better or worse
 

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@OneEyedDiva, I have not learned about required distributions yet. I am not at an age I have to do that. I have separate funds set aside for day to day living. I receive my husbands SS and a small work related pension. For now I am fine, no debt, and am quite comortable living on that. I happen to be thrifty by nature and don't need the latest and greatest. I do not travel because I am alone and the thought of it is scary. I will go with family if invited. I am just happy that I can stay in my home, have my pets and not need to worry when I go to the grocery store.
 
I stopped by the bank a few years ago to deposit $121 in ones into my account that I had been carrying around left over from a garage sale and a foreign trip (U.S. dollars are good for tips)..

I was asked for ID. ID to deposit it into MY account? Yep. Why? Well, over $100 in cash requires ID "by law". Explanation: it might be "drug cash". $121 in one dollar bills? What do they think I was doing? Pushing baby aspirin down at the day-care center?

Of course, that's the day I left my wallet at home. So I'll just make two deposits, $99 and $22. Not on the same day, I'm told. Without an ID, they'd have to refuse the second deposit.

At this point, I'm looking around for the Candid Camera cameras as this has to be a joke, right? No joke. They're very sorry, but they're dead serious.

Luckily, I found my passport in my purse so I was able to deposit my highly-suspicious money.

And they wonder why people keep money in their mattresses.....
 
jujube said:
I stopped by the bank a few years ago to deposit $121 in ones into my account that I had been carrying around left over from a garage sale and a foreign trip (U.S. dollars are good for tips)..

I was asked for ID. ID to deposit it into MY account? Yep. Why? Well, over $100 in cash requires ID "by law". Explanation: it might be "drug cash". $121 in one dollar bills? What do they think I was doing? Pushing baby aspirin down at the day-care center?

Of course, that's the day I left my wallet at home. So I'll just make two deposits, $99 and $22. Not on the same day, I'm told. Without an ID, they'd have to refuse the second deposit.

At this point, I'm looking around for the Candid Camera cameras as this has to be a joke, right? No joke. They're very sorry, but they're dead serious.

Luckily, I found my passport in my purse so I was able to deposit my highly-suspicious money.

And they wonder why people keep money in their mattresses.....
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I had the same thing happen last year. I thought it was crazy too! It was not even cash, it was a refund check from the doctor after insurance paid.
 
jujube said:
I stopped by the bank a few years ago to deposit $121 in ones into my account that I had been carrying around left over from a garage sale and a foreign trip (U.S. dollars are good for tips)..

I was asked for ID. ID to deposit it into MY account? Yep. Why? Well, over $100 in cash requires ID "by law". Explanation: it might be "drug cash". $121 in one dollar bills? What do they think I was doing? Pushing baby aspirin down at the day-care center?

Of course, that's the day I left my wallet at home. So I'll just make two deposits, $99 and $22. Not on the same day, I'm told. Without an ID, they'd have to refuse the second deposit.

At this point, I'm looking around for the Candid Camera cameras as this has to be a joke, right? No joke. They're very sorry, but they're dead serious.

Luckily, I found my passport in my purse so I was able to deposit my highly-suspicious money.

And they wonder why people keep money in their mattresses.....
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I've had that happen at least once and of course asked the same question as you...why the heck do I need to show ID to put money into my own account?! Thing is, I have my ID tucked away and don't like to have to pull it out from my secret place when others are around. No...not my bra. :LOL:

@Blessed..yes, we live in a crazy world, my friends. Also, I added links about IRS rules for taking RMDs to the post. Probably by the time you're at the age to start taking them, the rules will have changed again.
 
Gary O' said:
Did you try it with your acct deposit slip without your ID?
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I did with my own deposit slip. I have been with this bank for 40 years. I think that fraud has become so prevalent the financial institutions want to have everything accounted for. There are those times when money is deposited and then pulled right back out by scammers. I think it is an extra step they added to be able to spot any potential case of fraud.
 
OneEyedDiva said:
The bank rep who helped me open a new safe deposit box said as part of her spiel explaining the rules, that it's illegal to store cash in a safe deposit box. I understand the reasoning behind that if someone is committing a crime, but what about regular folks who are not. Other ways the Feds are telling us what we can and cannot do with our money:
~Limits your monthly transactions from an account.
”The federal rule, also known as Reg D, comes from the Federal Reserve Board and puts a limit of six transactions per month on certain transfers and withdrawals from your savings or money market accounts. If you go over the limit, the bank or credit union can charge you a fee, close your account or convert it into a checking account."

~You can be charged with criminal activity if you decide to deposit $10,000 in increments even though no criminal act was intended.
It’s called Structuring." If you deposit $10,000 or more, the bank must report the transaction to the Internal Revenue Service, and you’ll need to explain where you got the money. Don’t even think about dividing the cash into smaller amounts to stay below this limit, because the IRS can investigate you for structuring, which is an attempt to prevent the bank from reporting your deposit. Structuring is illegal. Even if you earned the money through legal channels and paid the necessary taxes, the IRS can charge you with criminal activity and take your money."

~People cannot contribute as much as they want to their retirement accounts. You will incur a 6% tax for excess contributions. Read about the limits here and other IRA rules here:
https://www.irs.gov/retirement-plan...yee/retirement-topics-ira-contribution-limits

~You have to withdraw your required minimum distributions (RMD's) by a certain age from a traditional IRA even if you don’t need or want to.
https://money.usnews.com/money/retirement/401ks/articles/new-rmd-rules-for-2023

~You have to withdraw RMDs from an inherited IRA even when it’s a Roth.

https://www.irs.gov/retirement-plan...nt-topics-required-minimum-distributions-rmds

Update: @Harry Le Hermit pointed out in his reply (#10), that there is no federal law regarding not storing cash in safe deposit boxes. So they can't be blamed for that one. Here is an article that supports what Harry posted: https://www.legalmatch.com/law-library/article/safe-deposit-boxes.html
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Got a friend that stores 50 grand cash in his safety deposit box...lol.
 
Just FYI - nothing stored in a safety deposit box is insured. You can keep a million $$$$$ in one if you want to, but in case of bank failure or event of disaster, you cannot make a claim against the FDIC or the bank. There may be banks who insure the contents of customer boxes, but I don't believe most banks do so.

Also, I've banked with a major national bank for 50 yrs, and have never had any problems on the rare time I've had to deposit cash. The $10K limit was instituted to prevent drug money laundering, which is fine with me. Not something I'd take personally, nor has it ever seriously inconvenienced me whenever we've done major transactions. Goes into escrow or holding for a couple of days extra but it's simply not a big deal at either end of the transaction.
 
Every time I used a safety deposit box, I never once recall someone standing around while I opened it. It was generally done in strict privacy. I do not understand why anyone would think there are actual limitations on items in such a box.
 
Liberty said:
Got a friend that stores 50 grand cash in his safety deposit box...lol.
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I don't know what the rules are where your friend lives but here in Jersey, once a person dies, their SD box must be audited before their next of kin can go into the box alone. My mother and I encountered that situation after my father died. So hopefully when he passes, if he has heirs, having all that cash in the box won't prove problematic for them.

@Harry Le Hermit I've had safe boxes for years and accessing the box has always been in strict privacy. The bank employees have always left the area, usually to go help other customers and I took the boxes into the little private room provided. But for the reason mentioned above, it may cause issues for heirs after the SD box owner's death. And like @Lethe200 mentioned, there may be times when the box is not accessible. When COVID first his, the bank my SD box is in was closed for several weeks. At some point they put a sign on the door saying people who needed to access their SD boxes should call a special number to make an appointment.
 
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OneEyedDiva said:
I don't know what the rules are where your friend lives but here in Jersey, once a person dies, their SD box must be audited before their next of kin can go into the box alone. My mother and I encountered that situation after my father died. So hopefully when he passes, if he has heirs, having all that cash in the box won't prove problematic for them.

@Harry Le Hermit I've had safe boxes for years and accessing the box has always been in strict privacy. The bank employees have always left the area, usually to go help other customers and I took the boxes into the little private room provided. But for the reason mentioned above, it may cause issues for heirs after the SD box owner's death. And like @Lethe200 mentioned, there may be times when the box is not accessible. When COVID first his, the bank my SD box is in was closed for several weeks. At some point they put a sign on the door saying people who needed to access their SD boxes should call a special number to make an appointment.
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My friend, a doctor, lives in Indiana....he absolutely distrusts any kind of stock market investment so
from time to time stores (parks) money in a safe deposit box between municipal bond or CD purchasing. Don't think he does it to avoid taxes. Just hope he remembers how much he has where...lol.
 
Jean-Paul said:
Safety Dep box: Upon holder's Death>>IRS locks and examines first

Cash, gold, bonds, jewels can be seized by US Gov.

.
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Incorrect.

"....Can the IRS get into my box? IRS representatives cannot arbitrarily gain access to your box. However, they can serve a Notice of Levy or Seizure requiring us to freeze your box. The IRS requests that you open the box in the presence of their representatives. " Answer by Envista Credit Union, Topeka KS
 
Lethe200 said:
Incorrect.

"....Can the IRS get into my box? IRS representatives cannot arbitrarily gain access to your box. However, they can serve a Notice of Levy or Seizure requiring us to freeze your box. The IRS requests that you open the box in the presence of their representatives. " Answer by Envista Credit Union, Topeka KS
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I don't know if the auditor was from the IRS or another agency, but when my father died, the bank rep informed me that someone would have to audit the contents of the box before my mother or I could access it again. And that's exactly what happened.
 
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