withdraw from rollover ira and re-deposit 60 day rule

ggelitetrader000 · Apr 5, 2025

ggelitetrader000 said:
saw it, but i think last sentence will apply to my situation, but i agree it is kinda ambiguous as well:

Retirement plans: A retirement plan distribution paid to you is subject to mandatory withholding of 20%, even if you intend to roll it over later. Withholding does not apply if you roll over the amount directly to another retirement plan or to an IRA. A distribution sent to you in the form of a check payable to the receiving plan or IRA is not subject to withholding.
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If they hold 20% and it turns out rollover, when and how i got it back??

ph1l · Apr 5, 2025

ggelitetrader000 said:
If they hold 20% and it turns out rollover, when and how i got it back??
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https://www.perplexity.ai/search/if-i-withdraw-money-from-an-ir-K1sR0E2pRJKRbfZcS_ATpQ

If you withdraw money from an IRA and 20% is withheld for taxes, but you deposit the full amount (including the withheld portion) into an IRA within 60 days, you can recover the withheld amount as part of your tax refund when you file your tax return. Here's how it works:

1. **Deposit the Full Amount**: To meet the IRS's 60-day rollover rule, you must redeposit the gross distribution amount (the amount you received plus the 20% withheld) into an IRA or another qualified retirement account within 60 days[2][3].

2. **Out-of-Pocket Contribution**: Since the 20% withheld was sent to the IRS as a tax prepayment, you'll need to use funds from another source to cover that amount when completing the rollover[6].

3. **Report on Tax Return**: When you file your tax return for the year, report the rollover and the taxes withheld using Form 1099-R (issued by your IRA custodian) and Form 5498 (which confirms the rollover). The 20% withheld will be credited toward your overall tax liability[6][7].

4. **Receive a Refund**: If your total tax liability for the year is less than the amount withheld, you'll receive a refund for the difference when your return is processed.

By following these steps, you can ensure that the withheld amount is credited back to you.

Citations:
[1] https://help.guideline.com/en/artic...ithhold-taxes-from-your-ira-cash-distribution
[2] https://www.investopedia.com/ask/answers/08/distribution-traditional-ira.asp
[3] https://www.fidelity.com/retirement-ira/ira-early-withdrawal
[4] https://institutional.fidelity.com/app/proxy/content?literatureURL=/704656.PDF
[5] https://www.irs.gov/retirement-plan...to-waivers-of-the-60-day-rollover-requirement
[6] https://www.hrblock.com/tax-center/income/retirement-income/reporting-401k-rollover-into-ira/
[7] https://thelink.ascensus.com/articles/2024/6/13/untangling-those-tricky-ira-withholding-rules
[8] https://www.missionsq.org/products-and-services/iras/ira-rollovers.html
[9] https://personal1.vanguard.com/pdf/s273.pdf?2210114361
[10] https://www.irs.gov/retirement-plan...vers-of-retirement-plan-and-ira-distributions

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Answer from Perplexity: https://www.perplexity.ai/search/if...K1sR0E2pRJKRbfZcS_ATpQ?utm_source=copy_output
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mervyn · Apr 5, 2025

ggelitetrader000 said:
If they hold 20% and it turns out rollover, when and how i got it back??
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lol, can you just go and ask at the branch, sure there are retirement specialists ready to help, it is their job, particularly you are moving lot of money.

ggelitetrader000 · Apr 12, 2025

so I received the check today and shows as distribution. I see on my online account balance is reduced by that amount. I am uncertain that this way, why they havent held the 20% amount aforementionaed above but I prefer that better. I will have to figure out how to deposit into my other rollover IRA account not as a contribution but as a transfer.

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withdraw from rollover ira and re-deposit 60 day rule

ggelitetrader000

ph1l

mervyn

ggelitetrader000