We are constantly saying that you should not do a 60-day rollover unless it is absolutely necessary. Here is a perfect example of why that's the case. The following story comes from a recent private letter ruling issued by IRS. It details some of the many ways a 60-day rollover can go horribly wrong.
Whenever you receive an IRA distribution, you have 60 days from the day you receive it to roll it over, tax-free, to another IRA. The failure to complete a rollover within 60 days means the funds aren't eligible for rollover, and that means the IRA distribution will be taxable to you. Also, if you’re under age 59 ½ at the time, the 10% early distribution penalty will apply. But in some cases, you can get more time to complete a tax-free rollover.
Private Letter Ruling 201347025 is an IRS first when it comes to the 60-day rollover rule. A taxpayer we will call "Ron" asserted that his failure to accomplish IRA rollovers within the 60-day rollover window was due to inaccurate advice from an IRS agent. Click to find out what happened to Ron.
This month's IRA Updates looks like Private Letter Ruling 201324022, in which IRS waived the rollover requirement due to a fraudulent withdrawal by the husband in this case. We look at the case and the ruling below.
If you have an IRA, you have access to your money at any time and for any reason (unless the IRA custodian has limits on your access). Unlike an employer retirement plan, such as a 401(k) or pension plan, you don’t have to ask anyone if you can take money out of your IRA to pay some bills. Your IRA is completely under your control, and no one can stop you from taking a distribution. But there are risks when you use your IRA funds for personal expenses during the 60-day rollover period.
This week's Slott Report Mailbag focuses on Roth IRAs and answers some of the more popular questions we receive. Should I go through with a Roth IRA conversion? Do I have to take required minimum distributions (RMDs) from my Roth IRA? Click to read a Q&A with our IRA Technical Expert.
On May 22nd, Congressman Richard E. Neal (D-MA) introduced H.R. 2117, The Retirement Plan Simplification and Enhancement Act of 2013, in the House of Representatives. H.R. 2117 is proposed legislation that is intended to boost retirement savings.
If you have a Roth IRA, you may want to move that money to another Roth IRA elsewhere. There are two ways to move Roth IRA money to another Roth IRA - we detail them below.
If you wanted to have a 2012 Roth IRA conversion, the conversion funds had to leave your IRA account by December 31, 2012. They don’t have to be in the Roth IRA in 2012, they just need to be out of the IRA in 2012. You can take a distribution payable to yourself in November or December 2012 and within 60 days, sometime in January or February, roll over the funds to a Roth IRA. You can even take the funds from an IRA at financial institution A and roll them over to a Roth IRA at financial institution B.
Can you believe summer is almost over? Yet, The Slott Report Mailbag was full of pertinent IRA and retirement planning questions from consumers who are trying to make the right decisions as the dog days rapidly turn into fall. This week's installment includes questions (and our answers) on the 60-day deadline on Roth IRA rollovers, 10% penalty exceptions and Roth IRA conversions.
