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When you roll over a retirement plan distribution, you generally don’t pay tax on it until you withdraw it from the new plan Original contributions to roth iras can be withdrawn at any time without tax or penalty However, the way you describe the transaction suggests you intended it as a rollover rather than a withdrawal followed by a new contribution. Comparing indirect rollover to other distribution options
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With an indirect rollover, you get a check that you must deposit in an approved retirement plan within 60 days of the money being withdrawn Additionally, rollovers between qualified plans and iras do not count either and there is no limit on the number of conversions between qualified plans and. This is not a calendar year The 12 month period starts on the date the individual receives the distribution from the ira.
With an indirect rollover, the company that manages your retirement account will give you a check or direct deposit, but they'll hold back 20% for taxes, unless you're doing an ira You have the option to add that amount back in when you deposit the money into the new account, but it's not mandatory. Taxpayers are also limited to one indirect rollover between ira or roth ira accounts every 365 days Any additional attempted indirect rollovers would be considered an account contribution and can potentially result in a 6% excess contribution penalty annually until corrected.
However, to be eligible for an indirect rollover, you must complete the process within 60 days.
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