(402) 397-5033 Jeff@omahaadvisors.com

By Sarah Brenner, JD
Director of Retirement Education

Question:

Ed

I heard on a podcast that you are the number one authority on IRAs, so I want to go to the most informative source.  Could you answer this question for me?

I have a Roth IRA and suddenly I was unable to view and edit my beneficiaries. I was told by the custodian that it was because the account was moved from a previous bank when they were bought out. I contacted the current custodian and they told me to open another Roth IRA with them and just transfer the funds.

Do you see any issues with me doing this such as the 5-year rule or early withdrawals?

Sincerely,

Robert

Answer:

Hi Robert,

You can go ahead and transfer your Roth IRA funds without worry. This will not affect the 5-year holding periods required for tax- and penalty-free Roth IRA distributions. It is a good decision to go with the direct trustee-to-trustee transfer rather than having distribution be a paid to you and then doing a 60-day rollover. Transfers avoid the headaches of both the 60-day rule and the once-per-year rule that apply to 60-day rollovers.

Question:

I opened a Roth IRA in 2021 with a $7,000 contribution.  Where will I report this when I file my taxes? Thank you in advance for answering this question.

Answer:

This is a question that comes up a lot and the answer may surprise you. Roth IRA contributions are not reported on your federal income tax return. The Roth IRA custodian will send you and the IRS Form 5498 showing the Roth contribution. However, it is still a good idea to keep your own records and track your Roth IRA contributions. This information is important to determine when your Roth IRA funds can be accessed tax- and penalty-free.

https://www.irahelp.com/slottreport/ira-rollovers-keeping-track-your-contributions-todays-slott-report-mailbag