Say you've named your older child primary beneficiary of one rollover IRA and your younger child primary beneficiary of another.
You are restricted to one rollover per year from an account: you must wait one year from the distribution date before you can make another IRA Rollover from that same account.
Similarly, a rollover from a pre-tax 401(k), 403(b) or 457(b) plan into a traditional IRA also qualifies, as well as a rollover from a SIMPLE IRA and SEP-IRA to a traditional IRA. Rules and restrictions apply, so keep reading.
By choosing an IRA rollover, your money remains sheltered from taxes until you begin withdrawing the money at retirement.
Another step Congress could take is to extend the so-called charitable IRA rollover.
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Not by taking more investment risk, but by moving your old 401k into what is known as an IRA Rollover account.
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What if Congress extends the charitable IRA rollover retroactively, or after many folks have already taken the minimum required distribution for 2012?
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It extended the charitable IRA rollover until the end of 2011, but allowed donors to make 2010 contributions retroactively through January, 2011.
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You are restricted to only one Rollover for each IRA account, either receiving or distributing during a full 12 months from the date of distribution.
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The first was that you could pay the tax on the rollover with non IRA funds, so that the whole smash could go into the Roth.
If, on the other hand, the charitable IRA rollover is not extended, you will get a charitable deduction for your contribution, subject to the usual limits.
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Here's why: If you stash all your stock in an IRA rollover, you will be taxed at your income tax rate when you start pulling the money out at retirement.
For example, even if you did not request an extension to file your 2010 tax return and actually filed your return on or before April 18, 2011 (because April 15 is a holiday in the District of Columbia), you have until October 17, 2011, to re-characterize your 2010 Roth IRA rollover or conversion.
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Not every kind of retirement account allows a tax-free rollover to a traditional IRA and vice versa.
Another reason some folks might be holding off on taking distributions is because they are waiting is to see if Congress will reinstate the IRA-Charitable Rollover law, which expired on Dec. 31, 2011 like many other tax extender provisions.
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An example is in order: You have an IRA at Mutual Fund Company A, and you take a rollover distribution, and you deposit the money into your IRA account at Brokerage B.
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You have until October 17, 2011 (because October 15, 2011, is a Saturday), to re-characterize your 2010 rollover or conversion to a Roth IRA if you file your 2010 tax return on time, including any extensions, and regardless of whether you requested an extension to file your 2010 tax return.
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Were talking to you if you have already accumulated a large sum in an IRA, perhaps from the rollover of a corporate retirement plan, and if you want to know whether you should convert that pot of money to Roth status.
But you get only 60 days to complete a rollover, and Dirks kept the money out of his IRA two weeks longer.
Briefly, when you take distribution from your 401(k) you can rollover everything but the company stock (your company) to an IRA, and then put the company stock in a taxable account.
Frequent reasons the IRS notices are not correct is that the IRA distribution is not taxable because it is an indirect rollover, a recharacterized Roth conversion, a previously taxed excess contribution or deferral, or even a correctly reported Qualified Charitable Distribution or one to a Public Safety Officer.
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Even if you turn around and invest those funds in an IRA or other retirement plan outside of the window, it is considered a regular contribution and not a rollover.
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