With many CDs now paying 5% or more, here's the No. 1 way to skirt an imminent tax hit on your CD earnings, one pro tells us.

Contributing sentiments towards policy:

63% :How to get tax smart when it comes to your CD
52% : "You can park your car in the driveway or in the garage, but in the garage, it is protected from the elements, just as an IRA shields your investment from taxes," says McBride.
50% : "If someone is in the 25% tax bracket and earns $500 in interest from a CD, they would owe $125 in taxes on that interest income," says financial planner Alex Doyle at Woodson Wealth Management.
49% : Furthermore, "in the top tax bracket of 37%, you net just 63 cents of every dollar of interest after accounting for taxes," says Greg McBride, chief financial analyst at Bankrate.
42% : How do taxes on CDs work?
39% : And we're not just talking about federal income tax -- CDs are also subject to state income tax.

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