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 ‘IRA Tax Benefits’
Frequently Asked Questions about the IRA Rollover Tax
Posted by admin on May 5th, 2010
One of the primary advantages of having an IRA is that you get to defer taxes on your money until a later time, when you anticipate having to pay less in rollover taxes. As you might expect, you lose that advantage if you have to pay IRA rollover taxes when you move your money between retirement accounts.
But what are the circumstances under which you have to pay IRA rollover taxes and how can you protect yourself from any unnecessary penalties?
First, you should know that there is no IRA rollover tax that you’re required to pay simply because you choose to rollover your money. There may be other fees involved with the transaction, but these shouldn’t be taxes owed to the IRA, provided you don’t take a distribution or withdrawal. So long as your money is directly transferred from one qualified IRA to another, you shouldn’t owe any IRA rollover taxes. (more…)
IRA Rollover Tax Exemptions – Protect Your Money
Posted by admin on April 23rd, 2010
An indirect IRA rollover occurs when you request the trustee of your IRA to send the funds you want to rollover directly to you, with the intention that you’ll reinvest them on your own into a new IRA through rollover. The problem with this rollover is that there’s a very real possibility that you’ll inadvertently change the tax burden on the money you’re moving, negating the IRA tax benefits for which you set up the IRA account at the first place. (more…)