Estimate the cost of an indirect rollover that misses the 60-day window, versus a direct trustee-to-trustee transfer.
Direct Trustee-to-Trustee
$0
Cost if executed correctly.
Indirect Rollover, 60-Day Miss
$0
Federal 0 plus State 0 plus 0 early-withdrawal penalty.
The only rollover mechanism the editors recommend is the direct trustee-to-trustee transfer on IRS Form 5498. Indirect rollovers are permitted but carry 60-day deadline risk and the once-per-year rule under IRS Revenue Procedure 2014-15. Miss the window and the distribution becomes taxable ordinary income. If you are under 59 and a half, add a 10 percent early-withdrawal penalty.