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IRA Financial Blog

Is My Self-Directed IRA FDIC Insured & IRS Direct File Pilot Results – Episode 438

Adam Talks

On this episode of Adam Talks, Adam Bergman, Esq. discusses how FDIC insurance pertains to your Self-Directed IRA investment; Adam will also share his thoughts on the IRS Direct File Pilot program.

Is My Self-Directed IRA FDIC Insured

On this episode of Adam Talks, Adam Bergman discusses the FDIC insurance coverage for Self-Directed IRAs, emphasizing how it applies to cash investments in bank accounts. He explains that FDIC insurance typically covers up to $250,000 per depositor but suggest that recent events, like the Silicon Valley Bank situation, may have changed this to potentially unlimited coverage for cash holdings in major banks. Bergman highlights the importance of diversifying funds across multiple banks and notes that assets such as securities, real estate, and cryptocurrencies are not FDIC-insured.

Furthermore, Bergman touches on the limitations of FDIC insurance, pointing out that investments in non-cash assets within Self-Directed IRAs are not protected by FDIC. He cautions listeners to conduct thorough due diligence before investing in assets like private stocks, venture capital, or real estate, as the government will not provide insurance or bailouts for such investments if they fail. The episode underscores the need for individuals to understand the risks associated with their investments and to be aware that the government will not intervene in the case of losses in non-cash assets.

Shifting focus, Bergman then delves into the IRS Direct Filing Pilot program, which aimed to simplify and streamline the tax filing process for taxpayers by offering a free online portal. He mentions that a significant number of taxpayers participated in the pilot, highlighting its potential impact on traditional tax filing services and the private sector. He speculates on how this initiative could affect accounting firms, particularly for low to middle-income individuals with straightforward tax situations.

The discussion continues by examining the potential repercussions of the IRS’s direct filing portal on online tax services and the competitive landscape for tax preparation. Bergman suggests that while this free government service may benefit simpler tax filers, individuals with more complex financial situations or business interests may still require the expertise and guidance of professional accountants. He predicts that this shift towards free government filing options may challenge the business model of online tax portals, especially for clients with basic tax needs who may opt for the convenience and cost-effectiveness of the government’s portal.

In conclusion, Bergman reiterates the importance of understanding the nuances of FDIC insurance and the risks associated with different types of investments within Self-Directed IRAs. He emphasizes the need for diligence and research when selecting investments, especially in assets that are not covered by FDIC insurance. Bergman closes with a reminder for listeners to subscribe to his YouTube channel for more insights on self-directed retirement accounts, tax strategies, and financial planning for investors and small business owners.


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