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Clear new hurdle on IRA rollovers

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in Small Business Tax

Following up on a 2014 Tax Court decision, the IRS is taking a tougher stance on the once-a-year rule for IRA rollovers in 2015. But you might still squeeze in under the wire.

Strategy: Complete a rollover of an IRA distribution made in 2014. As long as you meet the usual 60-day requirement, you won’t be responsible for any additional tax under the once-a-year rule.

The IRS issued a new ruling late in 2014 explaining this last-ditch tax break and providing other guidance. (IRS Announcement 2014-32, 11/10/14)

Here’s the whole story: Generally, you don’t have to pay any tax when you roll over funds between IRAs, as long as the rollover is completed within 60 days. You can do whatever you want with the money during this 60-day period. Furthermore, it doesn’t matter if you put the funds back in the same IRA or in a different one. But the tax law limits such rollovers to one a year.

Previously, the IRS stated in Pub. 590, Individ...(register to read more)

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