Since an IRA is a retirement savings plan that’s traditionally taken from your check before taxes are applied, any time that you’re transferring funds, you’ll want to take into consideration whether or not there will be any IRA rollover tax applied. The answer is that, in most cases, there isn’t an IRA tax if you choose to rollover your funds into a qualified plan and you go with a direct transfer. This is good news for you, but there are some things that you’ll need to do in order to make sure that you don’t end up paying unnecessary IRA rollover taxes. (more…)
Posts Tagged ‘Avoid IRA Rollover Tax’
Common IRA Rollover Tax Mistakes
Posted by admin on May 3rd, 2010
When you’re moving your money from one IRA to another IRA rollover account, you’ll want to take extra precautions to avoid making mistakes that will create an IRA tax burden for you. When handled properly, IRA rollovers can occur without any federal IRA taxes, withholding or penalties. But unfortunately, one small error can destroy this tax-free rollover status. Let’s look at how to protect your money.
How is Your IRA Rollover Handled?
The most common mistake is that, through a lack of understanding of how rollovers are handled or through a communication error, the money is handled in such a way that an IRA tax burden is created. If a rollover is properly handled as a direct rollover, no tax burden should be created. However, if the transaction is an indirect rollover or it becomes a distribution or withdrawal, IRA rollover taxes and penalties may come into play. (more…)
Avoid Unnecessary IRA Rollover Tax Penalties
Posted by admin on April 29th, 2010
Since dealing with IRA accounts and taxes can be confusing, many people end up facing unnecessary IRA rollover tax penalties on their rollovers. There are many different kinds of retirement accounts that rollover money between them can feel like a daunting and difficult task. However, there are some simple things you can do to protect your retirement investments and to make sure that you don’t end up paying IRA rollover taxes that you don’t need to. One of the first things that you need to do is to decide on the kind of IRA rollover account that you want to roll your money into. (more…)
Avoid the IRA Rollover Tax with a Direct Transfer
Posted by admin on March 23rd, 2010
Moving your money from an old employer-sponsored retirement plan – like a 401k or a 403b – to an IRA can be a smart move financially, as these accounts typically offer a wider range of investment opportunity and higher returns overall. However, if you aren’t careful, you could wind up on the hook for a serious IRA tax penalty. Let’s look more closely at how you can avoid this situation. (more…)