[pmrm]

I will be rolling my 401K pretax dollars into an IRA. How and when will I be taxed?

[AtlantaTaxExpert]

No tax is due if you had the 401K custodian roll it over directly to the IRS without YOU ever touching the money. You will get a Form 1099-R for the rollover, and the rollover DOES have to be reported on your 2007 tax return, but NO taxes are due.

If you HANDLED the money, I need to know if you opened the IRA within 60 days of the date on the disbursement check. Did you?

[pmrm]

I have not handled the money. The business I worked for has sold. I need to roll the 401K over in February. So nothing has been done yet.

[AtlantaTaxExpert]

Okay, then FIRST contact the IRA custodian, be it a bank, mutual fund, stock broker, whomever.

Tell them what you plan to do. They will either mail you or have you download from their website an IRA Rollover Package. It should include an authorization form for THEM to contact the 401K custodian to arrange for the custodian-to-custodian transfer of assets. You will need to complete and sign that authorization form, and either fax or mail it to the IRA custodian.

Once the IRA custodian has that authorization form, then they should do whatever else has to be done. It may take awhile (two months is not unusual), but it WILL get done.