Don’t hesitate to consolidate IRAs — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Don’t hesitate to consolidate IRAs

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. I have a SIMPLE-IRA, while my husband has a SEP-IRA and a traditional IRA. We’re both in our 50s. Can we consolidate these into traditional IRAs? B.R.M., Sioux City, Iowa

A. Yes. Your husband can shift funds from a SEP-IRA to his traditional IRA through a rollover. No tax withholding is required if a trustee-to-trustee transfer is used.

Similarly, you can roll over funds tax-free from a SIMPLE-IRA to a traditional IRA. But you must have been participating in the SIMPLE for at least two years. Otherwise, the transfer will be treated as a taxable distribution.

Tip: Consolidating accounts may make it easier for you to coordinate retirement plan investments.

Leave a Comment