Accidentaly rolled over 2x 401k accounts into a Roth IRA instead of a Traditional IRA
Hello,
I have accidentally rolled over 2x Fidelity 401k accounts from my 2x previous employers into a Vanguard Roth IRA instead of a Traditional IRA on 7/27/21.
The amounts were
$16,040.61
$45,738.77
Totalling $61,779.38
-I was told I have 60 days to transfer the funds.
-I was told the 2017 tax cuts and jobs act may be an issue.
-I was told that I can only move funds once every year. (Do the 2 distributions count as 2 moves?)
Please advise me on how I can reverse this or have the funds moved to the traditional IRA account without tax issues or penalties.
Thank you so much in advance.
Permalink Submitted by Alan - IRA critic on Sat, 2021-07-31 01:10
You did not mention any custodian error in the process, so I assume this was your error, eg you might have indicated the wrong IRA account number on a form or on line transaction. If so, you may have to pay the taxes due for these rollovers (conversions). On the other hand, if the custodian made the error you might be able to convince Vanguard to re do the rollover to your traditional IRA.
Since you cannot rollover a Roth IRA to a traditional IRA, a rollover or the number of rollovers is immaterial.
However, it is correct that the TCJA changed things starting in 2018 because it eliminated recharacterization of the rollovers you did to a traditional IRA, which could have been done through 2017. Now you cannot recharacterize these transactions.
Were these direct rollovers where the checks were made payable to your IRA at Vanguard rather than checks made payable to you? If so, did you keep a copy of these checks or a stub which indicated exactly the payee on the checks? Just checking to see if there might have been an error that was not your fault.
I assume that none of the Fidelity money had been held in a Roth 401k.