While you may be aware that you’re legally required to hire an IRA custodian to manage your IRA Bitcoin account, you might not be aware of all of the tasks which can be handled by a qualified custodian. In order to learn about the different ways in which Bitcoin IRA custodians can help you manage your investments, simply continue reading to discover a few of the most common tasks performed by IRA custodians.
4 Common IRA tasks which can be managed by Bitcoin IRA custodians:
Paying penalty fees for making an early withdrawal
One of the few drawbacks of investing in a Bitcoin IRA account is that it’s hard to withdraw money from your account until you’re 59 and a 1/2 years old. Which can seem like a lifetime away if you’re a young investor in your twenties or thirties. If your circumstances change after a couple of months or years and you decide to withdraw funds from your account, it’s highly probable that you’ll be charged a 10% penalty fee, which your Bitcoin custodian will be able to help you pay.
However, there are select circumstances in which you may be eligible to make a withdrawal without having to give up 10% of the funds in your Bitcoin IRA account. As examples, if you choose to apply to college or to purchase a first home, your custodian will be able to assist you in applying for a special exemption.
Protecting your assets
As digital currencies such as Bitcoin can’t be stored in a bank account, your IRA custodian will be in charge of protecting your Bitcoin assets by managing the Bitcoin wallet which your Bitcoins are kept in. Unfortunately, as an investor, you’re not able to manage your own Bitcoin wallet and must hire a Bitcoin custodian. However, you are free to ask your Bitcoin custodian as many questions as you’d like and can ask your chosen Bitcoin custodian to perform certain actions for you on your behalf.
Trading Bitcoin on your behalf
Not only can you ask your IRA custodian to purchase Bitcoin on your behalf but you can also ask your professional custodian to sell some of your Bitcoin shares on your behalf. Better yet, your custodian will also handle all of the legal paperwork which is required when you buy or sell shares. So if the thought of filling out a mountain of paperwork, doesn’t appeal to you, you’ll love having an experienced IRA custodian on hand to fill out your paperwork for you.
Making sure that your Bitcoin IRA account complies with tax regulations
Your IRA custodian will also make sure that your account complies with tax regulations. Which is fantastic as the last thing you need is for the IRS to breathe down your neck because your IRA account isn’t complicit with current IRA regulations. Better yet if IRA regulations change over the years, your chosen IRA custodian will also be able to ensure that your IRA account is effectively managed to comply with any new regulations which may have been passed by the US government.
While at first, you may balk at the thought of having to hire an IRA account custodian, in time you’ll grow to appreciate all of the hard work which your chosen custodian will take care of for you.