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 Taxes’
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…)
IRA Rollover Tax Deductions – What You Need to Know
Posted by admin on April 30th, 2010
IRA rollovers and IRA rollover taxes can be very confusing. This is because most rollover IRA accounts have been set up as a way for you to defer taxation on your income, and any time you deal with the money in these accounts, you’ll be left wondering whether or not you’re going to end up owing the IRS money for taxes. Rest assured, though – it is possible to navigate these tricky waters without owing any unnecessary IRA rollover tax. (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…)
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…)
IRA Rollover Tax Changes – What You Need to Know in 2010
Posted by admin on April 15th, 2010
Of all the IRA rollover tax changes for 2010, the most important ones concern the Roth IRA – one of the more restrictive types of IRA rollover that includes move money into and out of. To gain a better understanding of the 2010 IRA rollover tax changes, you’ll first need to know how a Roth IRA is defined and how it interacts with other types of IRAs. (more…)
Roth IRA Rollover Tax – What you’ll owe on Your Transfer
Posted by admin on April 8th, 2010
The year 2010 may well be remembered as the year of the Roth IRA. That’s because legislative changes that have taken effect this year are making it more advantageous – and possible – than ever before to rollover money from traditional IRAs into Roth IRAs. Most notably, the previous limits on adjusted gross income that prevented some individuals from investing in a Roth IRA are now gone, making this great option available to everyone. (more…)
Who is required to pay the IRA Rollover Tax?
Posted by admin on April 3rd, 2010
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…)
2010 Changes to the IRA Rollover Tax Policies
Posted by admin 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 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…)