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IRA Rollover Misconceptions and the New IRS Publication 590

This article originally ran on February 9, 2015.

By David Blask

Questions continue to come in concerning the IRS position, effective Jan. 1, 2015, that the one-per-year limit on IRA rollovers is applied to all IRAs owned by the taxpayer. 

Two points bear repeating. First, this change only affects rollovers from an IRA. It does not apply to rollovers to or from employer sponsored retirement plans such as a 403(b) or 401(k) plan. Secondly, there is no restriction on the number of direct, trustee-to-trustee IRA rollovers that can occur. The intention of the rule is to restrict taxpayers from repeatedly using the “float” of IRA rollover funds during the 60-day window applicable to indirect rollovers.

Another item of interest affecting IRAs is the recent release of IRS Publication 590 in two parts. Publication 560, Individual Retirement Accounts, has grown in size in recent years and the rules affecting traditional IRAs and Roth IRAs have become more complex. 

To make it easier to find answers, we now have Pub 590-A, Contributions to Individual IRAs, and Pub 590-B, Distributions From Individual IRAs. Contribution limits, rules on rollovers, and Roth IRA conversions can be found in Pub 590-A. If you need a quick review of the income limits to deduct an IRA contribution see What’s New for 2015 in part A. If you have questions on required distributions, penalties on premature distributions, or what types of Roth IRA distributions are taxable, 590-B is where you look. 

Check out the links above to see how this simplifies your search for information. 

David R. Blask, CPC, TGPC, AIF®, is the Senior Pension Consultant, Lincoln Investment Planning

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