dmertz
Level 15

Retirement tax questions

Regarding #1, I just want to make sure that this was requested as a return of part of the contribution made for 2021 just like the return of $3,398 was done as I mentioned several times previously, not requested as a regular distribution.  Given your BTW, I'm concerned that this done as an ordinary distribution.  If it was done as an ordinary distribution, the opportunity to avoid the 6% penalty for 2021 has been lost since only one of the ordinary $1,250 distributions can be rolled over.

 

As far as #2 goes, it has nothing to do with 2021.  It's simply a 60-day rollover of the ordinary Roth IRA distribution that was made on March 4, 2022.  If Vanguard won't accept this as a rollover, yes, your daughter could establish a Roth IRA at Fidelity and roll it over there.  The Roth IRA there can be opened online, but funding it with the $1,250 rollover generally requires mailing a check along with their Deposit Slip form with the "60-day rollover" box marked:

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/deposit-slip.pdf

 

See this IRS webpage regarding rollovers:

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-...