Potential Excess Contribution
For tax year 2015 I had a rollover from my Roth 401k with a previous employer to a new Roth IRA. I also took a portion of a traditional IRA and rolled that over into an existing Roth. Also for 2015 I opened a spousal traditional IRA for myself and a Roth IRA for my wife. She has enough income to cover the Traditional Spousal and Roth IRA’s for 2015. It’s my understanding that the rollovers are simply transfers and not new contributions. Am I okay here?
Please help/
Permalink Submitted by Alan - IRA critic on Sat, 2016-03-26 03:16
Yes. Rollovers are contributions, but they are not regular contributions and do not count against the regular contribution limits. Be sure to keep track of the composition of your Roth IRA including the Roth 401k rollover or you will not be able to report a non qualified Roth IRA distribution on Form 8606. This can be somewhat complex when you roll a Roth 401k to your Roth IRA.