Denver Investment Taxation FAQ
How do I rollover or transfer money to avoid taxation?
- It is best to rollover assets through a third party such as a brokerage firm, bank or insurance company. The IRS has a rule that enables participants to roll the money over themselves, but if the funds are not placed into another IRA within 60 days, the entire balance becomes taxed. Plus, if you are under 59 ½ it is also penalized 10%. We can help you avoid taxation with 401(k) rollovers and IRA transfers.
How will my investments be taxed?
- Most IRAs (everything but Roth) are taxed as ordinary income. Roth IRA distributions after the age of 59 ½ are tax free (you paid taxes on it when you contributed the funds to the account). The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.