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Retirement Beginner: Introduction to Individual Retirement Accounts (IRAs)

Introduction to Individual Retirement Accounts How You Can Fund Your IRA How to Contribute to an IRA How and When IRA Contributions Can Be Deducted from Taxable Income Limits on Deducting IRA Contributions if You Are Single or Married and Filing Separately Limits on Deducting IRA Contributions If You Are Married and Filing Jointly How IRAs Are Taxed Taxing of Deductible and Non-Deductible IRA Contributions Taxes on Excess IRA Contributions IRA Rollovers Premature Withdrawals and Insufficient Distributions from IRAs Summary of Individual Retirement Accounts
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IRA Rollovers

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IRA Rollovers

A rollover is the withdrawal of funds from an IRA and the transfer of those funds into another IRA. The following requirements must be met so that the IRA may keep its tax deferral:

  • The account may be rolled over only once per year.
  • The funds must be placed into the new IRA within 60 days.
  • If the amount transferred into the second IRA is less than the amount withdrawn from the first IRA, penalty taxes will be applied.

New IRS rule

You can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own, whether traditional, Roth, SEP, or SIMPLE IRA.

You can, however, continue to make as many trustee-to-trustee transfers between IRAs as you want. A trustee-to-trustee transfer is one in which the trustee of your IRA (that is, the custodian holding it) transfers your IRA funds directly to another custodian instead of to you first.

You can also make as many rollovers from traditional IRAs to Roth IRAs ("conversions") as you want.