التحويل غير المباشر هو عملية يتم فيها تحويل شيء ما إلى شكل آخر دون أن يتم التفاعل المباشر بين المصدر والوجهة. قد يتضمن ذلك استخدام وسائط أو أدوات لتسهيل التحويل. في السياقات المالية، قد يشير التحويل غير المباشر إلى العمليات التي تتم من خلال وسطاء أو أنظمة متعددة قبل الوصول إلى النتيجة النهائية.إذا كان لديك سياق محدد أو مثال معين في ذهنك، سأكون سعيدًا بتقديم مزيد من المعلومات!

Definition and Examples of Indirect Rollover

How does indirect rollover work?

Is indirect rollover worth it?

Definition and Examples of Indirect Rollover

Indirect rollover is when you withdraw money from a retirement account or Individual Retirement Account (IRA) and deposit it into another retirement account. You must deposit the amount into the other retirement account or IRA within 60 days to avoid tax penalties. Indirect rollovers are subject to automatic tax withholding, so you will need to replace the withheld funds when you do the rollover to maximize the tax benefits. Direct rollover transfers the funds directly from one account to another without any tax withholdings. Indirect rollover should be used with caution. If you do not follow all IRS rules correctly, you may face penalties.

How does indirect rollover work?

The Internal Revenue Service (IRS) defines eligible accounts for rollover and stipulates the penalties and other rules related to tax-advantaged retirement plans. Generally, the rollover allows tax-deferred growth of the retirement distribution with its tax benefits. However, there are certain conditions in the case of an indirect rollover.

Suppose you receive a direct payment of $20,000 for an indirect rollover. Before sending the check to you, the plan administrator will withhold 20%, or $4,000. When reinvesting the amount, you will have to make up the $4,000 from another source to deposit (and defer taxes on) the entire $20,000. Any amount you do not redeposit is subject to a 20% income tax withholding, plus an additional 10% early withdrawal penalty if you are under age 59 and a half.

Note: If your account balance is less than $1,000, you will not be able to do the rollover. Instead, the plan administrator will typically send you a check for the amount, minus 20% for mandatory income tax withholding.

Another rule to be aware of is the annual limit on one rollover for IRA accounts according to the IRS. It states, “You can only do one rollover from one IRA to another (or the same IRA) in any 12-month period, regardless of the number of IRAs you own.” There are some exceptions, including Roth conversions and transfers from trustee to trustee.

If you violate the one-rollover-per-year rule, all additional distributions will be treated as taxable income. Additionally, you may be subject to a 10% early withdrawal penalty and/or a 6% excess contribution penalty annually.

Is indirect rollover worth it?

Due to the rules and penalties that can confuse people during an indirect rollover, many individuals choose the direct rollover option, which is simple and straightforward.

With a direct rollover, the funds move directly from one account to another and are not received directly by the account owner, and there is little risk of making an expensive mistake.

Note: If necessary, indirect rollover allows you to use the funds for any purpose during the 60-day allowance period. Indirect rollover can be beneficial if you have an urgent need for cash now and know you can repay it within 60 days.

But the rules can be complicated, and mistakes can cost you. So, proceed with caution when doing an indirect rollover.

Source: https://www.thebalancemoney.com/what-is-an-indirect-rollover-5204115