when you fill out your 1040 there will be a qustion about withdrawing money from an ira. yes or no. are you going to lie to the irs?
The owner of the first brokerage firm I worked for taught me how to file taxes. He would open his checking account book and stare at it for a while and then write a number at the bottom of the form stating how much he owed, and then just start working his way backwards.
The IRS states in Pub 590: You can transfer, tax free, assets (money or property) from other retirement programs (including traditional IRAs) to a traditional IRA. You can make the following kinds of transfers. 1. Transfers from one trustee to another. 2. Rollovers. 3. Transfers incident to a divorce. Time Limit for Making a Rollover Contribution ⢠You generally must make the rollover contribution by the 60th day after the day you receive the distribution from your traditional IRA or your employer's plan. Rollovers completed after the 60-day period. In the absence of a waiver, amounts not rolled over within the 60-day period do not qualify for tax-free rollover treatment. You must treat them as a taxable distribution from either your IRA or your employer's plan. These amounts are taxable in the year distributed, even if the 60-day period expires in the next year. You may also have to pay a 10% additional tax on early distributions as discussed later under distributions. ⢠Unless there is a waiver or an extension of the 60-day rollover period, any contribution you make to your IRA more than 60 days after the distribution is a regular contribution, not a rollover contribution. What this doesnât tell you is the IRS has up to 3 years to process these rollovers. I have heard of people getting 60-day violations in the 3rd year after the rollover with a whopping tax bill because of the interest and penalties. Too many people assume the IRS is efficient and send out bills in 90 days. They are not.