Taxes on Inherited Money?

There's no penalty, but you will have to pay income taxes on inherited retirement savings, unless it was your spouse's.

QUESTION: A listener thought people could inherit money tax free up to a certain amount.  Why does the previous caller have to pay taxes on the money he inherited from his father’s retirement savings?

ANSWER: You cannot roll an inherited, tax-treated retirement account to your IRA or 401-K unless it is your spouse’s retirement account.  These retirement investments are pre-tax and that’s why you have to pay income taxes on it, not because it’s an inheritance.  There is no penalty though.

Jump-Start Your Goals!

Jump-Start Your Goals!

Get our 8-Day JUMP START series and weekly newsletter that are packed with articles and tools to help you win with money.

Reach Your Money Goals

Reach Your Money Goals

Start with a budget. Join the millions already budgeting with EveryDollar!

Create My (FREE) Budget

Thank You!

Your 8-Day Jump Start is on its way to !