Would large bank deposit and quick withdrawal raise tax red flags on our return?

You're overthinking this! The IRS doesn't get notified about regular banking transactions like deposits and withdrawals. What they DO track are actual income sources through W-2s, 1099s, etc. Banks are required to file Currency Transaction Reports (CTRs) for cash transactions over $10,000, but this doesn't apply to transfers between accounts or cashier's checks. Even if a CTR were filed, it's just for anti-money laundering purposes and doesn't trigger tax implications if the money isn't income. Since you're just temporarily consolidating funds that have already been taxed for a house purchase, there are no tax consequences. The money isn't new income - it's just moving around. One practical tip though: check with your bank about their policies for large cashier's checks. Some have waiting periods for recently deposited funds, so the full amount might not be immediately available. You might need to transfer the money several days before closing to avoid any delays.

After struggling with almost this exact situation when buying our house last year, I found an amazing tool that helped clear up all my confusion! Check out https://taxr.ai - it analyzes your specific situation and tells you exactly what tax implications you might face. I was worried about large transfers between accounts before our closing too, and the tool explained exactly why this wouldn't trigger any tax issues. It even provided documentation I could keep for my records in case questions ever came up. Super helpful for peace of mind!

I was super skeptical about using taxr.ai as mentioned above, but with our closing date approaching and my anxiety about a similar situation growing, I decided to give it a shot. The tool actually walked me through the exact scenario - temporary large deposits between spouses for home purchases. Turns out it's a common situation and there are zero tax implications as long as you're married filing jointly. The documentation it provided explained that intra-family transfers aren't taxable events and don't need to be reported. We were able to go with a single cashier's check and saved on fees without any tax headaches. Huge relief!

If you're worried about potential IRS questions later, one approach is to just call them directly and ask. But good luck with that - I spent 3+ hours on hold trying to get an answer to a similar question last year! That's when I discovered https://claimyr.com - they actually hold your place in the IRS phone queue and call you when an agent is about to pick up. You can see how it works here: https://youtu.be/_kiP6q8DX5c I used it to confirm directly with the IRS that temporary fund consolidation between spouses doesn't create any tax issues. Got a definitive answer straight from the source without wasting half my day on hold. Totally worth it for the peace of mind before making such a big financial move.

Well, I have to eat my words about Claimyr. After posting my skeptical comment, I had another tax issue come up that I needed to resolve quickly. Spent 45 minutes on hold with the IRS before giving up and reluctantly trying the service. It actually worked exactly as described. I got a call back about 90 minutes later when my place in the queue was coming up. Spoke directly with an IRS agent who confirmed that transfers between spouses aren't taxable events and don't need to be reported regardless of the amount. For the OP's specific question about the house closing - the agent explained this is extremely common and creates zero tax issues. The money isn't income, it's just being moved, so there's nothing to report on your tax return.

Former bank employee here! While everyone's right that there's no tax implications, be aware that moving large sums can sometimes trigger internal bank reviews under what's called BSA/AML (Bank Secrecy Act/Anti-Money Laundering) protocols. It's not a tax issue, but it can occasionally cause delays if the transaction gets flagged for review. To avoid any complications so close to closing: 1) Let your bank know in advance about the incoming/outgoing funds 2) Have documentation ready about the source (husband's account) and purpose (home purchase) 3) Consider doing the transfer 3-5 business days before you need the cashier's check This isn't about taxes at all - just practical advice to avoid any timing hiccups with your closing!

I went through this exact situation last year. We transferred $72k from my husband's account to mine to get a single cashier's check for our down payment. No tax implications whatsoever. BUT! One important thing to check is your bank's "new funds availability" policy. Our bank wouldn't issue a cashier's check for the full amount until the transfer had been in my account for 5 business days!! We didn't know this and it almost delayed our closing. Had to scramble and get our real estate agent to negotiate a few extra days.

Just went through this exact scenario two months ago! We consolidated about $58,000 from my husband's account to mine for our down payment. Zero tax issues - you're definitely overthinking it. The key thing is timing like others mentioned. Our bank (Wells Fargo) had a 3-business-day hold on the transferred funds before they'd issue a cashier's check for the full amount. We learned this the hard way when we tried to get the check the day after the transfer. What saved us was that our loan officer was familiar with this situation and suggested we could get a "bank wire" directly from my husband's account to the title company instead of doing the transfer/cashier's check route. Cost about $25 more but eliminated the hold period entirely. Might be worth asking your lender if they accept wires directly from multiple accounts - could save you the whole consolidation headache! Either way, no tax implications for moving money between spouses. The IRS doesn't care about your banking logistics, just your actual income sources.

Great question! As someone who just went through this process six months ago, I can confirm you're absolutely overthinking it. My wife and I did exactly what you're describing - consolidated about $91,000 from both our accounts into one for a single cashier's check. The IRS has zero interest in temporary fund movements between spouses for legitimate purposes like home purchases. What they care about is actual income that needs to be reported - wages, investment gains, business profits, etc. Moving already-taxed money around your own accounts doesn't create any new taxable events. A couple of practical tips from our experience: 1) Give your bank a heads up about the large transaction - we called ahead and they noted our account to expect the deposit/withdrawal 2) Ask about fund availability policies upfront - our bank required the money to sit for 2 business days before issuing a cashier's check for the full amount 3) Keep a simple paper trail (transfer confirmations, etc.) just for your own records, though it's not required The consolidation approach definitely worked well for us and saved on fees. Your closing attorney or loan officer can also confirm this is totally routine - they see it all the time. Don't let tax anxiety complicate what should be an exciting milestone! Congrats on the home purchase.