topic Re: Rollover in Retirement tax questions

Rollover

dtbella — Thu, 05 Mar 2020 14:05:14 GMT

I retired in 2019 at the age of 60. Upon retirement I withdrew funds from my Section 457 plan. Can I still rollover funds from the money received into an IRA account before April 15, 2020?

Re: Rollover

dmertz — Thu, 05 Mar 2020 15:04:54 GMT

The deadline for completing a rollover is the 60th day following the date of the distribution. If that distribution occurred in 2019, it's too late now to complete a rollover.

With sufficient compensation in 2019 to support a regular IRA contribution, you have until April 15, 2020 to make a new contribution, but it would not be a rollover. Whether or not the contribution to a traditional IRA would be deductible will depend on your modified AGI and filing status.

Re: Rollover

dtbella — Thu, 05 Mar 2020 15:23:50 GMT

When I entered a regular IRA contribution, Turbo Tax told me it didn't qualify based on my entered info. I assumed that meant that I was to roll that over before the 60 day deadline and that it was based on my being enrolled in a qualified plan in 2019. Is that accurate?

Re: Rollover

dmertz — Thu, 05 Mar 2020 15:51:21 GMT

No, entries under Deductions & Credits have nothing to do with rollovers. As long as you had sufficient compensation in 2019 to make a regular traditional IRA contribution, TurboTax was just telling you that your modified AGI in 2019 was too high to be able to deduct the contribution. You are still permitted to make the contribution. By not being able to deduct the contribution, it represents an amount that will be nontaxable when eventually distributed from the IRA. Until you have no more money in traditional IRAs, this will generally make each distribution a proportionate share of taxable and nontaxable amounts.