American Equity : IRA Tax Changes for 2015

IRS Changes Rules on IRA to IRA Rollovers

Oftentimes, it is beneficial to consider an IRA to IRA rollover. When a retirement plan distribution is rolled over, no taxes are paid until the funds are later withdrawn from the new plan. This allows the money to continue to grow tax-deferred. Effective in 2015, there is a change to the handling of Indirect Rollovers that we wanted to make you aware of. Please see the two types of rollovers below.

A Direct Rollover or a Direct Transfer is when funds are transferred directly from one IRA or retirement plan to another IRA or retirement plan. Direct Rollovers or Transfers between IRAs may be made at any time in any frequency.

During an Indirect Rollover, distributions are made from an IRA or retirement plan and paid directly to the individual. If the funds are re-deposited into a qualified IRA or retirement plan within 60 days, there are no taxes due on the distribution.

New in 2015: Only one 60-day rollover between IRAs may be completed per year per individual. For example, if an individual has multiple IRAs, only one IRA may participate in a 60-day rollover.

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This document is prepared to provide general information only. American Equity Investment Life Insurance Company does not give legal, tax or investment advice. Please consult your own personal advisor for these matters.