To take advantage of the opportunity to pay your taxes owed in two parts, you must request a direct rollover if your funds are being rolled over from a traditional IRA to a Roth IRA. A direct rollover is a transaction wherein your funds will be rollover directly between your current IRA and your target (or new) Roth IRA. You will never receive physical possession of the funds; if a check is issued, it will be paid directly to the trustee or manager of the Roth IRA account. (more…)
Posts Tagged ‘IRA Tax Rules’
Rollover IRA / Roth IRA Tax Rules
Posted by admin on March 31st, 2010
When it comes to Roth IRAs, the most important thing you must remember is that Roth IRAs are not structured like traditional IRAs. Traditional IRAs allow you to make contributions “off the top,” before any taxes are taken out of your gross salary. Contributions to Roth IRAs, conversely, are made with your after tax dollars, or net salary. This difference in the tax status of contributions is evident in almost every transaction involving a Roth IRA. (more…)
