I received my PwC Wealth Builder payout today (left PwC last year). Benefits Express didn't allow me to directly roll it into my Roth IRA. In the payout, federal income tax was already withheld. How do I put this money in my Roth IRA to avoid the early withdrawal penalty (assuming that applies). i.e. do I need to report it anywhere? Not a tax expert lol

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Did you get a direct check? If you haven’t deposited it you can sign it over to your Roth account, call your Roth custodian and they will tell you the exact process. If you already cashed it you have to put that exact amount into your Roth, again your custodian can make it happen. You can avoid the penalty in both methods you just have to check a box in your tax software to mark it for rollover (or tell your tax person). Ideally you will get a form 5498 from your Roth custodian to mark this contribution as a rollover. Also just because you avoid the 10% penalty doesn’t mean there isn’t tax implications of the rollover so just be aware of that. And potentially pay an estimate depending on the amount you rolled.

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Very true this should not be underestimated. It can be a big tax hit in the year of conversion. Long term you should save on the taxes, but paying it all in year one isn’t fun.

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Did you take an actual distribution (check made out to you)? If yes you’ll get hit with early withdrawal penalty and not sure you can avoid it via an IRA deposit. Did you not have a 401k you could have rolled that to.

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