How Many IRA Transfers Can I Do Per Year?

If you are unhappy with the service you receive concerning your IRA accounts, or just want to move the funds to a different trustee with different types of investments, you can transfer the money without incurring tax liability. You can complete a trustee-to-trustee transfer, where the IRA trustees take care of the transfer of funds, or you can perform your own tax-free rollover, where the trustee holding your money sends you a check and you deposit the funds into the new IRA on your own. More restrictions exist on tax-free rollovers than with transfers involving two trustees.

Trustee to Trustee

If you are transferring IRA funds using a trustee-to-trustee transfer, you have no limits on how many transfers you can complete in one year. With a trustee-to-trustee transfer, you do not have possession of the money at any time. The receiving trustee will request the funds to be transferred from the trustee holding the account, and it will send a check to the requesting trustee. These transfers are always tax free, but how long it takes to complete the transaction depends on the trustees, and is completely out of your control.

Tax-Free Rollover

You can complete a tax-free rollover of your IRA funds on your own if you adhere to certain rules about the timeframes for the completion of the rollover. To perform a tax-free rollover, request a withdrawal from the trustee holding the account, and deposit that money either into the same IRA account, or a new account of the same type. You can only complete one tax-free rollover every 12-month period, per IRA account.

60-Day Rule

Any funds that you withdraw from an IRA account for a tax-free rollover must be redeposited within 60 days. The 60-day window includes holidays and weekends, and does not have any grace period for completion. If you withdraw money, and do not redeposit the funds within 60 days, the rollover amount is treated as a distribution, and you will need to pay any applicable taxes and penalties that apply to your account.

12-Month Rule

The 12-month rule applies to the date that you withdraw the funds. The one year waiting period also applies to the account that funds were transferred from, as well as the account that the funds were transferred to. For example, you initiate a tax-free rollover from IRA 1 on April 1, 2012 by withdrawing the funds from that account. You deposit the amount that you withdrew into IRA 2 on May 23. Both account 1 and account 2 are not eligible for another tax-free rollover until April 1, 2013.