I had 401K plans from past employers I put them in both a IRA and a Roth IRA.?

Question

Do I have to claim my gains on my taxes?

Answer 1

If they rolled over directly into a regular IRA, without your ever touching the money, you don't have to declare the gains as income. If, however, you received the monies and then opened an IRA account, you'll have to pay taxes on the gains as well as the money you originally put into the 401K, if the money was pre-tax..

When you move a 401K or a regular IRA into a Roth IRA, you have to pay taxes on both the gain on the original money you put into the account and any gains, including employer contributions. None of this has yet been taxed, and all money going into a Roth IRA must be money on which you've paid taxes.

Worse than any of this, if you handled any money prior to moving it into an IRA, and you're less than 59 1/2, you have to pay a penalty.

Answer 2

still reading is close - but you don't necessarily pay a penalty or taxes because you handled the money. You have 60 days to roll it over into an IRA without penalty, and without paying taxes if it goes into a traditional IRA. If you put 401K money into a Roth IRA, then you do pay tax on the entire amount, since it was all pretax up to that point (your contribution, any employer contribution, and any gain). But as long as the entire amount you received from the 401K was put into an IRA (traditional OR Roth) within 60 days, there wouldn't be a penalty.

If you received the money, then rolled it over within the time allowed, you'll still receive a 1099-R for the amount and have to show it on your tax return, but you will note that it was rolled over, and won't have to pay taxes on it. If you had the money transferred directly from the 401K custodian to the IRA custodian of a traditional IRA, you won't even show it on your tax form.

Answer 3

Just to expand a bit on what was mentioned above.

If the money passes through your hands on the way to the Traditional IRA, 20% will still be withheld. You must however deposit 100% of the distribution into the IRA within those 60 days to avoid tax and the 10% penalty. If you're reading between the lines, by now you'll notice that that means that you need to come up with that 20% that was withheld from your pocket since you can't get it back until you file your tax return next year. If the rollover is significant, you may be in a world of hurt coming up with that money!

One more reason to do the hands-off rollover!

Answer 4

There are 2 aspects on your question. The 401k plan or a Roth IRA are merely mechanisms to regulate your earnings tax responsibilities. There are additionally Roth 401k plans. whether you pick one plan over yet another is in keeping with whilst does it make the main experience to pay your earnings taxes, now while you're in a low marginal fee earnings tax bracket (say 15%) now or once you retire and initiate taking flight the money. risk is predicated on the investment suggestions which you pick. you are able to pick an excellent extra riskier investment selection in a Roth IRA merely as definitely. The serious factor is while you're chasing severe rewards or returns, you will experience extra suitable volatility or risk. that is worthwhile to to bypass over your investment possibilities with the representative of the 401k plan administrator to enhance a complete plan that fits your risk tolerance. The 401k representative could be approved to grant education the place the IRA provider has regulations on how lots suggestion that they are able to furnish particular on your concern.

Answer 5

401K plans rolled into an IRA are done so in a tax free mode. The money continues to grow (we hope) and when you withdraw it after retirement you get a 1099R or its equivilant showing how much you take out each year and how much of it is taxable.