An IRA rollover is the movement of retirement assets from an IRA (Traditional, Roth or SEP) into another IRA and must be completed within 60 days from receipt of the IRA assets payable to the IRA owner. A rollover begins when the IRA owner takes physical receipt of the assets and is completed when the assets are deposited back into another IRA (or the same). If done correctly, the rollover is tax-reportable, but not taxable. Per the IRS, there is a “one-rollover-per-year” limitation (see IRS Publication 590-A). This means you are allowed only one rollover from an IRA to another (or the same) IRA in any 1-year period regardless of the number of IRAs you own.
Is an IRA rollover right for you?
Since there are many variables and rules associated with doing a rollover, it is highly recommended that you seek professional tax advice. If the rollover rules are not followed accordingly per the IRS, then a distribution from an IRA could be taxable and potentially subject to a 10% early withdrawal penalty.
What are the tax features of a rollover?
It’s generally non-taxable.
A rollover is tax-reportable, so you will receive tax documents, i.e., IRS Form 1099-R related to this event. The receiving IRA will issue IRS Form 5498 which reports the rollover amount. In addition, it may be necessary to indicate the rollover on your tax return but if done correctly, the rollover amount may not be taxable.
What should I know about withholding?
If any amount from the rollover was withheld for taxes, this amount could be subject to taxes and possibly an early withdrawal penalty if not accounted for when purchasing the assets back into an IRA. For example, if the IRA custodian/financial institution withheld 10% and remitted the proceeds to the IRS, then the withholding amount could be subject to ordinary income tax and possibly an early withdrawal penalty of 10% unless the full amount of the original distribution is rolled over within 60 days. Prior to receiving a distribution from an IRA, it is generally possible to opt out of withholding under the assumption that the entire amount of the distribution will be re-deposited into an IRA (existing or new) and the whole process will be completed within 60 days.
What is the investment minimum?
A rollover to an existing fund within your Janus Henderson IRA does not have a minimum investment requirement. However, if the incoming assets are rolled into a new Janus Henderson IRA or a new fund within an existing Janus Henderson IRA, a minimum of $1,000 or $100 with a minimum automatic investment of $50 per month will apply.
How does an IRA owner request a rollover?
If you are eligible and desire to roll over your Janus Henderson IRA, you may request a distribution by telephone, website or in writing (download the form). Upon your distribution request, the IRA proceeds will be sent to you in the form of a check or deposited to your bank on record. You may then contact the receiving custodian or financial institution of your IRA for deposit instructions.
What other information would be helpful?
Exception to the 60-day rollover period
Depending on your circumstances, it is possible to extend the rollover period beyond 60 days. The IRS does allow for self-certification to accomplish a late rollover. If this is the case, please contact a Janus Henderson Retirement Representative at 1.800.525.1093 for more details and instructions. Regardless, as a taxpayer it is your responsibility to determine the amount of the rollover and the eligibility requirements to accomplish a rollover. Janus Henderson does not determine the eligibility of your rollover assets into an IRA.
Don’t forget: Required Minimum Distributions (RMDs) and other assets may not be eligible for a rollover
Required Minimum Distributions (RMDs), which are mandatory distributions starting April 1 of the year following the year in which you reach age 73, are not eligible as a rollover. For a complete list of other ineligible rollover assets, please seek professional tax advice or access IRS Publication 590-B.
Read the fine print
For more information about doing a rollover, it is recommended you review the Janus Henderson Universal IRA Disclosure and Custodial Agreement.
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Contact a Janus Henderson Representative
Our Janus Henderson Representatives will answer your questions and assist you through the movement of assets process. We are available at 800.525.1093 weekdays 9 a.m. to 6 p.m. EST.