May Key Focus
60-Day IRA Rollovers - How to Count The 60 Days
An IRA rollover occurs when you take money out of your IRA or
Roth IRA and the distribution is payable to you. You can put the
funds in your bank account, spend them, invest them, do anything
you want with them (within reason of course). Then, within 60
days, you can put all or part of the distributed amount back into
your IRA or Roth IRA. There are no taxes or penalties on this
But how do you know when the 60 days are up? You do NOT
start counting the 60 days from the date you request the
distribution, the date on the check, or the date the funds left the
IRA account. You start counting the days on the date you receive
the funds if they are mailed, or the date they hit your bank account
if they are transferred.
NOTE: It is 60 days, not 90 days as many taxpayers seem to
believe based on the countless Private Letter Ruling (PLR)
requests to IRS we read from individuals begging for an extension
to complete a rollover.
It is never a good idea to wait until the last day to complete a
rollover. You might find that the bank closed early for a holiday
or that your 60th day falls on a weekend. The financial institution
could make a mistake and put your funds in a non-IRA account
(we’ve seen this happen before). Any number of things could go
wrong so you want to complete your rollover as soon as possible -
not as the clock is counting down.
In fact, don’t do a rollover at all. You can do a direct transfer
from one IRA custodian to another. Then you don’t have any of
the problems or issues described above. You worked hard for that
money. Don’t lose it because of a careless mistake,
procrastination or a bank holiday.
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