Beginning this year, a new rule applies to individual retirement account (IRA) rollovers because of a U.S. Tax Court ruling in 2014. Now, you may make only one rollover from one IRA to another IRA in any 12-month period, regardless of how many IRAs you have. In the past, you could roll over any number of different IRAs once during a 12-month period and avoid taxes or penalties as long as you rolled the balances over into a new IRA within 60 days.
The new rule does not affect trustee-to-trustee transfers. It’s important to note that you can transfer any number of IRAs you own through other financial institutions directly to an IRA at Navigator Credit Union without taxes or penalties. The new rule applies only when you take a distribution (e.g., a check is made out to you) and then roll the funds into a different IRA within 60 days.
The IRS created a transition period to help taxpayers adjust to the new rule. A distribution from an IRA received during 2014 and properly rolled over to another IRA will have no impact on any distributions and rollovers during 2015 involving any other IRAs owned by the same individual. IRA owners have a fresh start in 2015 when applying the one per- year rollover limit to multiple IRAs. The rule also does not restrict conversion of traditional IRAs to Roth IRAs.
Ready to Simplify?
Consider consolidating multiple IRAs into one IRA through trustee-to-trustee transfer. With just one IRA, you’ll enjoy easier record keeping that can make managing your retirement savings simpler. Talk to an IRA specialist at Navigator Credit Union today. Call 228-475-7300.