When you take out money from your Roth IRA and put it back in, you're technically doing a rollover. Though you probably think of a rollover as moving money from one account to another, the IRS also treats taking money out and putting it back in as a rollover. So, if you've taken money out of your Roth IRA, you can only put it back in if you qualify for a rollover.
Only 60 Days
You only have 60 days to complete a rollover, counted from the day you take the money out. Say you take out your Roth IRA money on June 28. You only have until Aug. 27 to get the money back in the Roth IRA. If you don't, it's usually permanently distributed and you can't put it back. In rare circumstances, such as if the bank makes a mistake, or you're ill in the hospital when the deadline passes, you might be able to get an extension -- but don't bank on it.
Once Per Year
You must wait at least 12 months after your last rollover to or from the Roth IRA before starting a new rollover from the same account. For example, say you completed a rollover to your Roth IRA on May 10, 2013. Any distribution from that Roth IRA before May 10, 2014 isn't eligible to be rolled over. Sorry, rollovers don't allow you to keep an endless cycle of withdrawals and redeposits going indefinitely.
Distributions Ineligible for Rollovers
Certain types of distributions can't be rolled over, period. If you've inherited a Roth IRA and are taking required minimum distributions each year, those aren't eligible to be put back into the account. You also can't roll over any money you take out to correct excess distributions or any distributions that are part of a series of substantially equal withdrawals.
As long as you complete them on time and in full, your rollovers aren't taxable. But, they will cost you a little extra time spent on reporting them and you won't be able to use Form 1040EZ. For Form 1040 users, the amount of the rollover goes on line 15a, $0 goes on line 15b and "rollover" goes next to line 15b. For Form 1040A uses, the amount of the rollover goes on line 11a, $0 goes on line 11b and "rollover" goes next to line 11b.
- How to Report an IRA Rollover on a Tax Return
- Can You Roll Over a Safe Harbor 401(k) Plan to an IRA Account?
- How Many IRA Rollovers Can You Do in a Year?
- How to Take Out a Cash Distribution From a Rollover IRA
- Rules & Regulations for a SEP IRA Rollover
- Can a Simple IRA Be Rolled Over Into a Traditional IRA?