Before hiring a Bitcoin IRA custodian, it’s well worth learning about some of the key tasks which can be handled by a custodian. So if you’re interested in finding out how hiring one of the awesome Bitcoin IRA custodians can make your life far simpler, simply continue reading!
Tasks which can be handled by Bitcoin IRA custodians:
- Setting up your Bitcoin IRA account
While it’s possible to set up a self-directed Bitcoin IRA account, unless you fancy spending hours completing the necessary paperwork to set up your own account, you’re far better off hiring an experienced custodian to ensure that your account is set up properly.
The first task which your chosen custodian can handle for you is to help you shift funds from your 401k account to your Bitcoin IRA account. However, you can also choose to fund your IRA account from other sources, if you’d prefer not to touch your 401k account.
- Taking care of all of your tax obligations
In order to avoid being pursued by the IRS for failing to provide accurate and timely details of all of your Bitcoin transactions, you can ask your chosen custodian to regularly send notifications of all of your investment transactions to the IRS. Which will ensure that the IRS will leave you alone.
When the day comes to make your first withdrawal from your IRA retirement account, your trusty Bitcoin custodian will be able to help you pay the necessary tax on all of the profit which your account has made over the years. Which is likely to be a sizeable amount of money as you should expect to more than double your contributions to your bitcoin IRA account, so it’s highly likely that you’ll have to pay tens of thousands of dollars in taxes to the IRS.
- Ensuring that you receive a wide variety of tax benefits
One of the ways which the government tries to encourage individuals to invest in Bitcoin, in order to help individuals save for their retirement years is to remove the tax which individuals normally pay when they purchase Bitcoin. So if you want to ensure that you don’t pay tax on the Bitcoins which you purchase to keep in your IRA account, it’s well worth talking to your chosen Bitcoin custodian, to ensure that you don’t end up paying any tax on your investments.
- Making sure that your Bitcoins are safely secured
Your custodian can also help you set up a secure Bitcoin wallet, which you can use to safely secure your investments. As the last thing you want to have happen is for your precious Bitcoins to be hacked. In most cases, your custodian should opt to store your Bitcoin in a hardware wallet as while paper wallets are generally cheaper, they require writing down your password on a piece of paper, which is an extremely dangerous option. As if you lost track of your password, there would be no way to access your Bitcoin wallet.
So before you open up your Bitcoin IRA account, make sure to hire an experienced Bitcoin custodian.