Advertisement
retirement

Savers Get a Break on IRA Rollovers

Missed the deadline? The IRS may cut you some slack.

New rules at the IRS cut you a break when you’re rolling over one retirement account to another. If you don’t roll over funds within 60 days, the money is treated as a distribution, subject to penalty (if you’re under 59 1/2) and taxes. You always had the option of applying for a waiver and then waiting for a private letter ruling from the IRS, with the money in limbo in the meantime. Now, you’ll get the benefit of the doubt if you submit a statement saying that you missed the deadline for one of 11 reasons. Among them: the financial institution receiving or making the distribution made an error; the taxpayer or a family member was seriously ill; or the most time-honored of all, the Post Office messed up.

The IRS provides a template for certifying that you qualify for the waiver. With the form, the financial institution where you want to move the money can accept it as a qualified rollover. You can also report the contribution as a rollover on your tax return. The IRS could later determine that you either didn’t meet the requirement or didn’t make the contribution as soon as you could have, in which case you could still be subject to taxes and penalties. Avoid such snafus by having the distribution transferred directly from one institution to the other.

Advertisement
Advertisement

Most Popular

18 Things You Can't Return to Amazon
Smart Buying

18 Things You Can't Return to Amazon

Before tossing these items into your virtual shopping cart, be sure to read Amazon's return policy first.
September 17, 2020
Election 2020: Joe Biden's Tax Plans
taxes

Election 2020: Joe Biden's Tax Plans

With the economy in trouble, tax policy takes on added importance in the 2020 presidential election. So, let's take a look at what Joe Biden has said …
September 18, 2020
7 Foreign Countries Luring Americans to Work Abroad During the Pandemic
careers

7 Foreign Countries Luring Americans to Work Abroad During the Pandemic

Work remotely – really remotely – in these appealing destinations offering special visas for American workers.
September 18, 2020

Recommended

Insurance for Long-Term Care at Home
retirement

Insurance for Long-Term Care at Home

In the wake of COVID-wracked nursing homes, increasingly more people are looking at options to age in place with long-term care insurance.
September 17, 2020
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
10 Things You'll Spend More on in Retirement
retirement

10 Things You'll Spend More on in Retirement

From reading materials to debt, the demands on your savings during your golden years might surprise you.
September 16, 2020
Retirees, Create An Emergency Fund for Rental Property
Business Costs & Regulation

Retirees, Create An Emergency Fund for Rental Property

Build a cushion to protect your income from an unforeseen crisis.
September 15, 2020