CHARLOTTE, NC / ACCESSWIRE / July 6, 2019 / The words ‘Transfers” and “Rollovers” might sound like they have a similar meaning, but when it comes to a Self-Directed IRA, it pays to know the difference. That’s the idea behind a recent post at American IRA, where the Self-Directed IRA administration firm elucidated the differences between the two actions and how they might benefit retirement investors in different ways.
As the post notes, “these differences matter a great deal to the IRS, and if you do not understand them, it could have a substantial impact on your taxes.” The post then explains by defining transfers and rollovers. Transfers, according to the post, are relatively simple: it’s the act of moving a Self-Directed IRA from one firm to another. The funds move directly from one IRA to another and the funds are never directly held by the IRA owner. Because of this, transfers are not reported to the IRS, and there are no limits on how many times investors may do this.
But with rollovers, that’s not quite the story. A direct rollover occurs when someone moves funds from a qualified retirement plan other than an IRA into a Traditional IRA. The funds are sent directly from one provider to another, but the difference from a transfer is that the IRS is then notified of the transaction. This is strictly for paperwork purposes, as there is no tax due on the rollover funds.
In an indirect rollover, there could be more complications. This is the type of rollover in which a retiree does take possession of the money personally. As such, the IRS is interested in making sure that retirement investors follow the rules and do not use it to dodge the rules regulating retirement accounts.
“There are three essential methods of moving money around,” said Jim Hitt, CEO of American IRA. “And it’s not only important to know the differences, but for retirement investors to understand why these differences exist. And it’s important to understand the consequences of each. When doing a transfer, the process is straightforward. In an indirect rollover, however, the process can be very complicated and require careful planning on the part of the retirement investor.”
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term “they” refers to American IRA, located in Asheville and Charlotte, NC.
SOURCE: American IRA, LLC
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