When transferring 401K funds to an IRA, you will receive a Form 1099-R informing you of the distribution. The way you declare the transfer to the IRS depends on the type of reinvestment. To start the process, you will need to contact your provider or initiate it online. They may require some documents, such as a Letter of Acceptance (LOA) from Fidelity or for you or a Fidelity representative to complete and sign your own documents.
If you have multiple accounts or employers, you may need more than one LOA. Before transferring your retirement assets, it is important to consider all of the available options and the fees and features associated with each one (sticking with your previous employer's plan, transferring it to a new employer plan, transferring it to an IRA, or withdrawing cash). You have 60 days from the date of the IRA or retirement plan distribution to transfer it to another plan or IRA. If you deposit the funds into another IRA within 60 days of the distribution date, cumulative distributions are exempt from tax.
The limit will be applied by adding up all of a person's IRAs, including SEP and SIMPLE IRAs, as well as traditional and Roth IRAs, effectively treating them as a single IRA for the purposes of the limit. This change will not affect your ability to transfer funds from one IRA trustee directly to another, since this type of transfer is not a transfer (Tax Resolution 78-406, 1978-2 C. B.). Additionally, you cannot make a transfer during this 1-year period from the IRA to which the distribution was transferred. Most pre-retirement payments received from a retirement plan or IRA can be “reinvested” by depositing the payment into another retirement plan or IRA within 60 days.
