Is there an actual IRA rollover tax? Strictly speaking, no. But does that mean you won’t be required to pay taxes when you rollover your IRA? Not necessarily. (more…)
Posts Tagged ‘ira rollover tax’
2010 Changes to the IRA Rollover Tax Policies
Posted by bobrichards on March 30th, 2010
Generally speaking, if you rollover your money from one IRA to another IRA, there are no IRA taxes involved. Money invested in an IRA is usually tax deferred, meaning that you don’t pay taxes on the money when you earn it, but rather when you withdraw it from the IRA. So long as the money moves from one qualified IRA to another and is not distributed to you, that money maintains its tax deferred status.
But then there are Roth IRAs. Roth IRAs are different from traditional IRAs in one very important way – you contribute to a Roth IRA using after tax dollars. This means that if you move money from a traditional IRA to a Roth IRA, you have to pay IRA taxes on the money when you move it. You may be surprised to find out that that isn’t a bad thing, especially now. (more…)
Avoid the IRA Rollover Tax with a Direct Transfer
Posted by bobrichards 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…)
Understanding IRA Rollover Tax Implications
Posted by bobrichards on March 16th, 2010
Tax planning should be a crucial part of your retirement savings strategy, as simple tax mistakes can easily cut the balance of your retirement accounts in half. Let’s look at some of the most common situations that can trigger IRA rollover tax implications within your retirement plans.
IRA Rollovers from Employer-Sponsored Plans
The most common situation that triggers an IRA rollover tax is the rollover process itself, where funds are moved from an old employer-sponsored 401k or 403b account to a traditional or Roth IRA. Account holders have two major options when initiating an IRA rollover – a direct rollover or an indirect rollover. (more…)