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IRA Rollovers and Transfers

Taxpayers are allowed to have one rollover from an IRA to the same or another IRA in any one-year period regardless of the number of IRAs owned.  The rollover must be completed by the 60th day after the distribution is made. Taxes will be withheld from a distribution from a retirement plan, so the taxpayer will have to use other funds to roll over the full amount of the distribution to avoid the early distribution penalty and the taxable income treatment. If the taxpayer does not roll over all the distribution received, the remaining amount is taxable and may be subject to an early distribution penalty of 10%.  The taxpayer must report a rollover distribution on his tax return. 


Taxpayers can also roll over money from eligible retirement plans to Roth IRAs. These rollovers or conversions are taxed as regular income in the year of the distribution.  Rollover to Roth IRAs are not limited but must be completed by the 60th day after distribution.


Taxpayers can also request trustee to trustee transfers.  These rollovers are made tax-free and are not limited by the “one rollover in any one-year period” rule.

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Cathy Fisher

Common Cents Bookkeeping and Tax Preparation

Serving Henderson, NC, Buncombe County, Polk County, Transylvania County

E: cathy@commoncentsqbo.com

P: 828-595-2835

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