If you’ve decided to open a Bitcoin IRA account, in order to purchase Bitcoin at a competitive price, you’ll need to appoint a custodian whose job it will be to ensure that you receive all the tax benefits, which are associated with setting up an IRA account.
It’s also compulsory to appoint an IRA custodian, as the secondary job of an IRA custodian is to report all of your account’s transactions to the IRS. To ensure that you’re fulfilling all of your IRS obligations.
3 Tips on selecting reputable Bitcoin IRA custodians:
1. Choose a custodian whose fees are clear as you don’t want any nasty surprises in the future
Most custodians will charge maintenance fees, which will cover most of their services. Depending on the firm which you opt for, your short-list of possible custodians may choose to charge maintenance fees on a weekly, quarterly or annual basis. No matter which payment structure each custodian chooses to advertise, you can compare each custodian’s annual fees accurately, by calculating how much each custodian charges for maintenance in a single year.
Other examples of fees which custodians commonly charge include transaction fees as well as commission-based fees.
2. Choose a custodian who’ll inform you of all of your rights as a Bitcoin IRA investor
A great custodian will make sure that you’re well aware of all of your rights as a Bitcoin IRA investor and will also make sure that you’re aware of all the rules and regulations which surround opening a Bitcoin IRA account. As an example, your custodian may be able to help you pay the necessary tax on your profits when it comes time to make your first withdrawal from your retirement account.
As unfortunately, while you’ll be able to purchase your Bitcoins, without paying tax, you will be expected to pay tax, when you decide to make withdrawals from your investment account.
Another important task which your chosen custodian should be able to help you with is helping you file for a penalty-free exemption if you choose to make a withdrawal before the minimum age of 59 and a half and believe that you have a valid reason for requesting a withdrawal. Examples of situations in which your custodian may be able to push for a penalty-free exemption include if you decide to purchase your first home or if you choose to enroll in a college degree.
3. Choose a custodian who has a well-established reputation
Before you sign a contract on the dotted line, make sure to research your top candidate to make sure that they are a reputable custodian, who has plenty of satisfied clients. As unfortunately, scam artists posing as genuine Bitcoin IRA custodians do exist and are more than willing to take advantage of unsuspecting investors.
If you’re highly interested in the possibility of opening your very own Bitcoin IRA account, it’s well worth completing due diligence to ensure that you pick an experienced custodian, who you can trust to take proper care of your Bitcoin IRA account.
