How to Do an IRA Rollover: Rules, Deadlines & Step-by-Step Guide

An IRA rollover is a tax-advantaged method to transfer retirement savings from one account to another. You typically need a rollover when you leave a job and want to move your 401(k) into an IRA, when consolidating multiple retirement accounts, or when converting a traditional IRA to a Roth IRA.

A direct rollover (also called a trustee-to-trustee transfer) moves funds between financial institutions without the money touching your hands. The original custodian sends the assets directly to the new custodian, and no taxes are withheld.

Rollovers are not subject to annual IRA contribution limits; you can roll over any amount from a 401(k), 403(b), 457 or another IRA regardless of the standard limit (which is set by the IRS and indexed for inflation each year). However, the one-rollover-per-year rule applies strictly to indirect IRA-to-IRA rollovers: if you receive a distribution and personally redeposit it, you cannot do another indirect rollover from any of your IRAs for 12 months.

A Roth conversion rollover moves Traditional IRA assets into a Roth IRA, triggering ordinary income tax on the converted amount in the year of the conversion. Begin by calculating the tax cost: the entire pre-tax balance you convert is added to your taxable income, potentially pushing you into a higher bracket.

Use a direct trustee-to-trustee transfer for every rollover unless you have a compelling reason to take possession of the funds. This method bypasses withholding, eliminates the 60-day clock, and is not subject to the one-rollover-per-year rule.

Can I roll over my 401(k) to an IRA while still employed?

Most employer plans do not permit in-service rollovers unless you are 59½ or older, or the plan document specifically allows it. Check your summary plan description or contact your HR department; if rollovers are prohibited, you must wait until you separate from service.

How many times per year can I do an IRA rollover?

Do I need to report an IRA rollover on my tax return?

Yes. A direct rollover appears on Form 1099-R with distribution code "G" (direct rollover); report it on Form 1040 but indicate zero taxable amount.

What is the 60-day rollover rule for an IRA?

When you take an indirect distribution from an IRA or employer plan, you have 60 calendar days from the date you receive the funds to deposit the full amount into an eligible retirement account. The IRS counts the day after you receive the distribution as day one; weekends and holidays are included.

Can I split a 401(k) rollover between a Traditional IRA and a Roth IRA?

Is there a penalty for rolling over a Roth 401(k) to a Roth IRA?

No penalty or taxes apply when you roll a Roth 401(k) directly into a Roth IRA. Both accounts are after-tax.