Print Free Rollover chart – Rollover 60 day rule, distribution penalties and fines, permitted IRA rollovers…(read more)

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If you have been saving for retirement through an IRA (Individual retirement account) and you are looking to transfer or rollover your funds to another IRA or retirement plan, it’s important to understand the rules and regulations surrounding IRA rollovers.

The IRS (Internal Revenue Service) has specific guidelines for permitted rollovers that vary depending on the type of IRA you have and the source of the funds. Understanding these guidelines can help ensure that you don’t incur penalties or taxes and that you’re taking full advantage of the benefits of an IRA.

To simplify the process, the IRS has created an IRA rollover chart that outlines the rules for permitted IRA rollovers. This chart shows the types of rollovers allowed, the timeframes for completing the rollovers, and the tax implications involved.

Here are some of the permitted IRA rollovers and their rules as outlined in the chart:

– Traditional IRA to Traditional IRA rollover: You can roll over all or a portion of your traditional IRA to another traditional IRA in a tax-free transaction. This must be completed within 60 days of receiving the distribution.

– Roth IRA to Roth IRA rollover: Similarly, you can roll over assets from one Roth IRA to another Roth IRA as long as it’s completed within 60 days. You must also have held the Roth IRA for at least five years to avoid penalties on the earnings that are withdrawn.

– Traditional IRA to Roth IRA conversion: This allows you to convert funds from a traditional IRA to a Roth IRA. However, you must pay taxes on the converted amount, so it’s important to consider your tax bracket and future retirement income when making this decision.

– Qualified plan to Traditional or Roth IRA rollover: You can roll over funds from a qualified employer plan, such as a 401(k), to a traditional or Roth IRA. This must be completed within 60 days of receiving the distribution, and taxes will be due on any pre-tax contributions and earnings.

It’s important to note that there are some restrictions and limitations on IRA rollovers. For example, you can only complete one IRA-to-IRA rollover per year, and certain types of distributions, such as required minimum distributions (RMDs), cannot be rolled over.

If you’re considering an IRA rollover, it’s important to work with a financial advisor or tax professional to ensure that you understand the rules and regulations and make informed decisions about your retirement savings. The IRA rollover chart can serve as a helpful reference to ensure that you’re following the guidelines and avoiding unnecessary taxes or penalties.